Tax Bites - November 2025

Welcome to the latest edition of RPC's Tax Bites – providing monthly bite-sized updates from the tax world.

News

HMRC publishes Guidance on upcoming changes to umbrella company PAYE rules

HMRC has published Guidance which explains what companies should consider if they are in a labour supply chain that includes an umbrella company, or any third party supplying labour.

Draft legislation was published on 21 July 2025, which includes measures to make UK agencies supplying workers to end clients jointly and severally responsible for the PAYE liabilities of the umbrella company that employs the worker. These rules will come into force on 6 April 2026.

The Guidance provides a high-level explanation of how these rules will work.

HMRC has also added new paragraphs to its employment status manual: ESM2400 to ESM2440.

HMRC publishes Guidance on how digital platform operators should report sellers' information to HMRC

Digital platforms are required to collect details from sellers on their platforms and report this information to HMRC. A digital platform includes any software, including mobile apps and websites, which allow you to offer services and goods to users.

HMRC has published Guidance which explains how digital platform operators should:

1. Check whether they need to register with HMRC as a digital platform operator.
2. Collect information from sellers on their platform.
3. Report that information to HMRC.

HMRC has also published Guidance in respect of steps two and three, which can be viewed here and here.

HMRC publishes Guidance on Research and Development tax relief claims

HMRC has published the following additional Guidance relating to claims for research and development (R&D) tax relief:

1. Guidance and an online tool which allows you to input information about your project and receive HMRC's view as to whether it might qualify for R&D tax relief.

2. Guidance for agents or accountancy professionals explaining how to report other agents and professionals who are suspected of giving HMRC misleading information, having poor technical knowledge, or engaging in dishonest behaviour.

HMRC publishes policy paper on the tax treatment of Cryptoasset Exchange Traded Notes

Cryptoasset Exchange Traded Notes (CETNs) are debt instruments that mirror the performance of specified cryptoassets. CETNs were previously restricted to professional investors but from 8 October 2025, following changes to Financial Conduct Authority rules, they will be open to retail investors as well.

HMRC has published a policy paper which explains how CETNs will be treated for tax purposes, including their eligibility for inclusion within Individual Savings Accounts and registered pension schemes.

HMRC publishes new pages in its International Exchange of Information Manual listing reportable jurisdictions for Digital Platform Tax Reporting

HMRC has published new pages in its International Exchange of Information Manual providing updated lists of partner and reportable jurisdictions under the UK’s digital platform tax reporting rules, as set out in the Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 (SI 2023/817).

The updates include:

• IEIM906000 – revised list of partner jurisdictions for the 2025 reporting period.
• IEIM906100 – revised list of reportable jurisdictions for 2025.
• IEIM906200 – index page for previous reporting periods.
• IEIM906201 – list of reportable jurisdictions for 2024.

New partner jurisdictions added for the 2025 reporting period include: Colombia, Croatia, Czechia, Iceland, Lithuania, the Netherlands, Poland, the Slovak Republic, and Slovenia.

Case reports

Case 1

Tribunal grants taxpayer's application for disclosure against HMRC in Kittel appeal

In CIS-Pay Ltd v HMRC [2025] UKFTT 00751 (TC), the First-tier Tribunal (FTT) granted the taxpayer's application for disclosure of all material within HMRC's possession that might assist its case or undermine HMRC's case.

This decision highlights the importance that the FTT attaches to protecting procedural fairness in hearings involving penalties, that are considered criminal charges, due to their punitive nature.

The FTT recognised that although the underlying tax appeal fell outside the protections of Article 6 of the European Convention on Human Rights, the penalty issue constituted a criminal charge engaging Article 6 rights, including disclosure obligations. It rejected HMRC's argument that Article 6 rights are limited only to penalty specific conditions and do not extend to overlapping issues with the substantive appeal. 

You can read our commentary on the decision here.

Case 2

Tribunal confirms its decision on 'intangible fixed assets' preventing HMRC from reopening the issue

In Inside Track 3 LLP and Ingenious Film Partners 2 LLP v HMRC [2025] UKFTT 986, the FTT has issued a further decision in the long running Ingenious film partnerships litigation and has ruled in favour of the taxpayers, confirming that its decision, of several years earlier, had determined that certain rights held by the LLPs constitute intangible fixed assets, for the purposes of Part 8 of the Corporation Tax Act 2009, and HMRC could not therefore reopen that issue.

This decision reinforces the importance of paying attention at every stage of the appeal process, especially with regard to appeal deadlines in complex and multi-faceted tax litigation. Points left unappealed cannot be revisited. When appealing a decision of the tax tribunals, it is important to ensure that all issues are carefully considered and taken on appeal if necessary, in order to avoid any later ambiguity arising. In complex multi-stage disputes, tax advisers need to be alert to which points have been expressly, or implicitly, decided and which issues remain to be determined. 

This decision enhances the principle of finality and certainty in tax litigation. Once an issue is decided and unchallenged on appeal, it should no longer be vulnerable to fresh attack.

You can read our commentary on the decision here.

Case 3

IHT not due on failed EBT arrangement

In Tonkin v HMRC [2025] UKFTT 750 (TC), the FTT allowed the taxpayer's appeal against a charge to inheritance tax (IHT) under section 94 (charge on participators in a close company), Inheritance Act 1984, which HMRC considered had arisen as a result of an ineffective employee benefit trust (EBT) arrangement.

This is a significant victory for the taxpayer. The decision considers fundamental issues of double taxation and the ability of HMRC to take different approaches in the context of different taxes. The decision is likely to be welcomed by the large number of taxpayers who implemented EBT arrangements and in respect of whom HMRC wish to impose an IHT liability.

You can read our commentary on the decision here.

And finally …

In collaboration with Temple Tax Chambers, our latest Tax Take webinar series explore the UK tax landscape and key considerations for professionals and business leaders seeking insights into the often-complex world of tax.

The webinars cover the following topics:

- HMRC's penalty regime

- Judicial review proceedings

- Research & Development tax reliefs

- HMRC's information powers

Recordings of the webinars can be found on Tax Take +