Tax analysis: On 23 June 2026, HMRC published a consultation document (the Consultation Document) on reforming the taxation of company distributions and repayments of capital. The consultation (which runs until 14 September 2026) is focussed on the treatment of shareholders subject to income tax, rather than corporation tax, although HMRC is keen to understand any implications and unintended consequences of the proposals for corporation tax payers. HMRC note that many of the rules under review have changed little since corporation tax was introduced in 1965. They have also not kept pace with changes in corporate law; in particular, the relaxation, both within and outside the UK, of ‘capital maintenance’ rules (eg rules limiting distributions out of share capital or share premium). HMRC is keen to eliminate ‘distortions’ but also states that there is no fixed timetable for implementing changes. The most important thing is to get the changes right. A number of significant topics are covered in the Consultation Document. Dr Michael McGowan, Visiting Professor, Dickson Poon School of Law, King's College, London summarises the proposals.

HM Revenue and Customs (HMRC) is consulting on the UK implementation of the OECD Cryptoasset Reporting Framework (CARF) and amendments to the Common Reporting Standard, seeking views on extension to domestic reporting. Responses are sought by 29 May 2024.

HM Revenue & Customs has launched a technical consultation on draft secondary legislation for the Carbon Border Adjustment Mechanism (CBAM) emissions and verification requirements, which will take effect on 1 January 2027. The consultation concerns the draft Carbon Border Adjustment Mechanism (Emissions and Verification) Regulations 2026, made under the Finance Act 2026, and seeks stakeholder feedback on provisions governing the calculation of embodied emissions in specified imported goods, including the use of default values or verified actual emissions data, as well as detailed requirements for emissions monitoring, independent verification and record keeping. The draft regulations are intended to ensure that the CBAM operates effectively and as intended, and are supported by a draft System Boundaries Document defining relevant production processes and emissions, and a draft Force of Law Notice illustrating how the CBAM legislative framework will operate as a whole. The consultation closes on 21 May 2026.

HM Revenue and Customs (HMRC) has opened a consultation seeking views on introducing a new criminal offence for making reckless untrue statements or declarations in direct tax, aligning with existing offences under the Customs and Excise Management Act 1979 and the Value Added Tax Act 1994. The proposed offence would apply where a taxpayer makes an ‘untrue’ statement while ‘aware of the risk’ of falsity and proceeds unreasonably, providing prosecutors with an alternative charge where dishonesty cannot be proved, with proposed sanctions of an either‑way offence carrying up to two years’ imprisonment and/or an unlimited fine. The measure aims to address inconsistency between direct and indirect tax regimes, enable juries to return verdicts reflecting culpability short of dishonesty and support enforcement and closing the tax gap, while excluding innocent mistakes or ‘careless’ errors from scope. The consultation closes on 16 August 2026.

FORTHCOMING CHANGE relating to the proposed introduction of a criminal offence for making reckless untrue statements or declarations in direct tax: on 23 June 2026, following an announcement at Budget 2025, HMRC published a consultation (closing date: 16 August 2026) seeking views on a proposal to introduce a criminal offence for direct tax matters, committed where an untrue statement or declaration is made recklessly. For more information, see News Analysis: Tax update 2026—Tax analysis. This Practice Note describes HMRC's powers to investigate tax-related criminal offences, including the power to carry out a dawn raid. It explains HMRC's discretion to investigate fraud using either its criminal or its civil powers, and describes the main tax-related offences. HMRC can investigate suspected tax-related criminal offences in England and Wales using the powers, and subject to the safeguards, in the Police and Criminal Evidence Act 1984 (PACE 1984). There is parallel legislation for Northern Ireland. PACE does not apply in Scotland but there is legislation containing powers and safeguards that mirror the PACE provisions, adapted

FORTHCOMING CHANGE relating to HMRC’s third-party data-gathering powers and the introduction of standing obligations to provide data: On 20 July 2026, HMRC published a technical consultation entitled ‘Draft legislation: Better use of new and improved third-party data’, concerning interest income and card sales data. It sought views on draft regulations under Schedule 23 to the Finance Act 2026, reporting schemas and supporting notices and guidance. The proposals include ongoing reporting without individual HMRC notices, prescribed reporting frequencies, and requirements concerning customer tax references, data verification and advance notification to HMRC. The consultation closed on 20 August 2026. The draft regulations provide for commencement on 6 April 2028. HMRC's information powers in Schedule 36 to the Finance Act 2008 (FA 2008) (see Practice Note: HMRC information powers) are supplemented by data-gathering powers in Schedule 23 to the Finance Act 2011 (FA 2011). This Practice Note is about these data-gathering powers, which are also known as bulk information powers. The FA 2011 data-gathering powers are aimed at third parties, known as data-holders, and (unlike the FA 2008 information

When conducting a criminal investigation, HMRC has the power to apply to a magistrate for a warrant to enter and search premises. It can also seize and retain any material covered by the warrant. HMRC's powers to investigate criminal offences, and the circumstances in which it may use them, are described in Practice Note: HMRC criminal investigations and dawn raids. This Checklist contains a practical list of things to do, or not to do, in a dawn raid. It can be used as a reference guide for clients who may be facing a dawn raid. The procedures described would need to be communicated to staff in advance. As the client would not know about the dawn raid before it happens this may be problematic. It may be possible to circulate the guide on a 'just in case' basis. It is also a good idea to train key staff on how to manage and respond to a dawn raid. What to expect in a dawn raid In a tax context, a dawn raid means a visit from HMRC

HM Revenue and Customs has issued an article debunking common myths about who needs to file a Self Assessment return before the 31 January 2025 deadline. Anyone who needs to complete a Self Assessment tax return for the first time to cover the 2023–2024 tax year must register by 5 October 2024.

HM Revenue and Customs (HMRC) has reported that 17 takeaways across England have been subject to unannounced inspections. This forms part of an Electronic Sales Suppression (ESS) probe as ESS tools are used to under report sales and therefore evade tax.

HMRC has made further updates to the Pensions Tax Manual on 4, 5 and 8 April 2024 to take account of the abolition of the lifetime allowance (LTA) from 6 April 2024.

HMRC has published guidance on applying for refunds of higher rates of Stamp Duty Land Tax (SDLT).

ARCHIVED: This Practice Note is archived and no longer maintained. HMRC enforcement guidance HMRC’s civil measures for money laundering supervision (HMRC’s guidance) sets out how HMRC will use its civil and criminal enforcement powers under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692. Practitioners will also find the HMRC—Economic Crime Supervision Handbook useful when advising on this topic. HMRC’s approach to enforcement—general approach HMRC’s approach to enforcement is risk-based and has three strands: • to promote compliance by engaging with businesses and helping them to put in place appropriate controls to counter the threat that they may be used by criminals to launder money or fund terrorism • to prevent noncompliance by making sure that businesses’ processes and interactions with customers help them stay on the right side of the law. HMRC will challenge high-risk businesses and those with inappropriate controls • to respond to noncompliance by treating noncompliant businesses in a way that encourages sustained compliance in future