Tax Bites - November 2026

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

News

HMRC opens Consultation in connection with Plastic Packaging Tax

HMRC has opened a technical consultation on draft regulations governing the conditions that businesses must meet if they wish to use a mass balance approach to account for chemically recycled plastic for Plastic Packaging Tax purposes, from 1 April 2027.

View the Plastic Packaging Tax Consultation.

HMRC updates its Cryptoasset Guidance

HMRC has updated its Guidance for taxpayers who may need to pay tax when they sell cryptoassets.

The updated Guidance includes a video about how cryptoassets are taxed for individuals.

Read the updated Cryptoasset Guidance.

OECD publishes its 2025 Model Tax Convention on Income and Capital

The OECD has published the full version of the Model Tax Convention on Income and Capital, which was a key reference used by OECD members and non-members as a basis for negotiating, applying and interpreting bilateral tax treaties.

Read the Model Tax Convention on Income and Capital.

HMRC updates its Guidance on compliance checks into large and complex businesses

HMRC has updated its Guidance on compliance checks into large and complex businesses.

The updated Guidance now includes reference to the recently introduced Plastic Packaging Tax, Vaping Duty Stamps Scheme and Vaping Product Duty.

Read the updated Guidance on compliance checks for large businesses.

Case reports

UT confirms that taxpayers were carrying on a business with a view to profit

In HMRC v GCH Corporation Ltd and others [2026] UKUT 00219 (TCC), the Upper Tribunal (UT) dismissed HMRC's appeal and confirmed that GCH Active LLP was carrying on a business with a view to profit, for the purposes of section 59A, Taxation of Chargeable Gains Act 1992, at the time loan notes were transferred to it.

As the requirements of section 59A were satisfied, the transfers were capital contributions, rather than disposals, and no Capital Gains Tax liability arose.

The UT's analysis of the meaning of 'business' and the application of the Ramsay principle of purposive statutory construction will be of general interest to taxpayers. 

It is also noteworthy that neither the First-tier Tribunal (FTT) nor the UT was unduly influenced by the fact that the taxpayers had participated in a tax mitigation arrangement, notwithstanding the best efforts of HMRC to persuade them otherwise. Both tribunals carried out a thorough objective analysis of the relevant facts and relevant law in arriving at their respective decisions.

Read our commentary on GCH Corporation Ltd.

UT remits £880m loan relationship dispute back to the FTT

In Barclays Bank plc v HMRC [2026] UKUT 212, the UT held that the FTT had erred in law when determining that £3 billion was paid wholly for reserve capital instruments and not partly for warrants issued by Barclays plc, the taxpayer's parent company.

The UT's decision demonstrates the practical difficulty taxpayers face when appealing findings of fact from the FTT.  Even though the taxpayer was able to successfully demonstrate that the FTT had erred by taking into account irrelevant considerations, the UT decided to remit the appeal to the FTT to reconsider its decision.

Read our commentary on Barclays Bank plc.

FTT limits HMRC's Schedule 36 powers in transfer pricing case

In Lifeplus Europe Ltd v HMRC [2026] UKFTT 797 (TC), the FTT allowed the taxpayer's appeal against an information notice issued by HMRC, pursuant to paragraph 1, Schedule 36, Finance Act 2008, as the information requested by HMRC was not reasonably required to check the taxpayer's tax position and the taxpayer did not have the information in its power or possession.

This decision reinforces the requirement that information requested by a notice issued by HMRC to a taxpayer under paragraph 1, Schedule 36, Finance Act 2008, must be 'reasonably required' to check the taxpayer's tax position and that, even in a complex, long-running transfer pricing enquiry, HMRC must establish (the onus being on it) a real evidential need for the information it is seeking.

The FTT also confirmed that being in the same corporate group, even with overlapping officers/directors, does not automatically put parent documents within a subsidiary’s 'power'. Corporate groups may wish to review their confidentiality protocols and should carefully evidence access restrictions and decision-making regarding document release. 

Read our commentary on Lifeplus Europe Ltd.

And finally …

Adam Craggs and Liam McKay have published an article discussing the new Prohibition of Promotion regime, which prohibits a person from promoting tax avoidance arrangements that have no real prospect of succeeding.

Read their article here: 'HMRC issues guidance on new Prohibition of Promotion Regime'.