Tax Bites - September 2026

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

News

HMRC updates its Guidance for correcting transfer pricing errors

HMRC has updated its Guidance for correcting transfer pricing errors to include information about the Transfer Pricing and Profit Diversion Compliance Facility that is available for taxpayers to amend their tax position for certain significant or complex transfer pricing errors where a return can no longer be amended.

HMRC updates its Guidance on the Construction Industry Scheme

HMRC has updated its Construction Industry Scheme Guidance to include a section on the Informants Scheme.

The update includes a recorded webinar explaining how to use the Informants Scheme when reporting tax fraud or avoidance.

HMRC publishes new Guidance on what to do if you disagree with a correction it has made to your tax return

HMRC has published new Guidance entitled "Disagree with a revenue correction notice", which explains what to do if you disagree with a correction notice issued by HMRC.

Interestingly, the Guidance was updated a week after it was published to clarify that you can only use the Guidance if HMRC has told you that you can.

HMRC updates its Mandatory Tax Adviser Registration Manual

HMRC has published a new page in its Mandatory Tax Adviser Registration Manual (MTAR10150), which explains how the requirement to register as a tax adviser applies where multiple businesses contribute to tax advice delivered to a single client.

HMRC publishes new Guidance for short-term business visitors

HMRC has published "Help with short-term business visitors – Guidelines for Compliance 19".

The Guidance explains how the PAYE, Income Tax, and National Insurance rules work when overseas workers come to the UK for short periods.

Case reports

Court of Appeal dismisses HMRC's appeal and confirms interest payment not caught by anti-abuse provision in UK-Ireland double tax treaty

In HMRC v Burlington Loan Management DAC [2026] EWCA Civ 461, the Court of Appeal upheld the decisions of the First-tier Tribunal (FTT) and Upper Tribunal and confirmed that Article 12(1) of the UK-Ireland double taxation treaty applied to exempt interest from withholding tax on the relevant debt claim and Article 12(5) did not disapply that treatment.

Whilst this decision provides some helpful guidance on the correct interpretation of treaty anti-abuse articles, by side-stepping the substantive analysis of the main purpose test, the Court has missed an opportunity to provide taxpayers with greater guidance and clarity on how the main purpose test applies.

The judgment also provides some reassurance for those participating in the UK secondary debt markets who factor in available treaty reliefs.

Read our commentary on Burlington.

Supreme Court confirms capital allowances not available for expenditure on windfarm

In Orsted West of Duddon Sands (UK) Ltd and others v HMRC [2026] UKSC 12, the Supreme Court, in allowing HMRC's appeal, held that expenditure incurred on studies and surveys informing the design and installation of windfarms did not qualify for capital allowances due to their "tangential" connection with the diminishing value of the windfarm assets.

This judgment has significant implications for the capital allowances treatment of pre-construction expenditure. Taxpayers should consider reviewing historic claims to assess whether the Court's reasoning affects the availability of relief in respect of previously incurred costs.

The decision also highlights the importance of maintaining contemporaneous documentary evidence to demonstrate the connection between individual studies, surveys and other preparatory activities and the subsequent provision of qualifying plant and machinery. 

Read our commentary on Orsted.

Tribunal allows taxpayer's appeal in statutory residence test case

In Michael Parker v HMRC [2026] UKFTT 652 (TC), the FTT allowed the taxpayer's appeal, finding that four disputed days in the UK did not count for the purposes of the statutory residence test, as three days fell within the transit exception and one day within the exceptional circumstances exception.

The FTT rejected HMRC's unduly narrow interpretation of the legislation. The decision provides helpful guidance as to when days in the UK can be disregarded for the purposes of the transit day and exceptional circumstances exceptions. 

Taxpayers will welcome the FTT’s decision on the transit exception, adopting a purposive approach to the meaning of 'a passenger’, for the purposes of paragraph 22(3), Schedule 45, Finance Act 2013. 

Read our commentary on Parker.

And finally ...

In the latest episode of Taxing Matters, host Michelle Sloane was joined by RPC's Head of Tax, Investigations and Financial Crime, Adam Craggs to discuss the merits and drawbacks of HMRC's new Strengthened Reward Scheme.

Listen to HMRC's Strengthened Reward Scheme – a new era for tax whistleblowers?