United Kingdom: Tax Authorities

HMRC has proposed new legislation requiring taxpayers to correct known inaccuracies in tax returns, with failures to act being treated as deliberate behaviour attracting higher penalties and extended assessment periods. The draft legislation introduces a statutory duty to correct errors once identified and grants HMRC power to issue Customer Correction Notices, fundamentally shifting tax compliance from a technical exercise to a governance obligation that boards must actively oversee.

HMRC's enforcement agenda continues to intensify with new criminal offences for reckless statements, mandatory error correction obligations, and expanded compliance burdens on taxpayers and advisers. Recent Supreme Court decisions in BlueCrest and HFFX have narrowed the ground available to taxpayers, while the Court of Appeal's pushback in M R Currell offers some relief against overreach in disguised remuneration rules.

The First-tier Tribunal examined whether HMRC could retrospectively impose late payment penalties and surcharges after reallocating tax payments made by a taxpayer who had entered into unsuccessful tax avoidance schemes. The case centered on the critical question of whether tax liability should be assessed at a specific point in time or whether subsequent payment reallocations could create retroactive late payment scenarios.

From April 2027, HMRC will begin mandatory payrolling of benefits in kind, moving away from the current system of year-end reporting towards real-time deductions through payroll. HMRC has confirmed a two-phased approach: only selected benefits will be subject to mandatory payrolling from April 2027, with full payrolling expected from April 2028 (subject to certain exclusions discussed below).

Gary Stevenson has taken the case for a UK wealth tax from YouTube to his recent Channel 4 documentary, How to Get Filthy Rich. The Labour government continues to face pressure to shift more of the tax burden from work towards assets and accumulated wealth, even though a comprehensive wealth tax is not currently government policy.

The UK Government has introduced draft legislation requiring taxpayers to actively correct errors in their tax returns, fundamentally shifting responsibility from HMRC to individuals and businesses. The new framework includes a general obligation to self-correct inaccuracies and introduces Customer Correction Notices, which allow HMRC to require taxpayers to review specific positions. Failure to correct identified errors will result in them being reclassified as deliberate, triggering significantly harsher

For decades, discussions surrounding international trade barriers have centred primarily on tariffs. Import duties, customs procedures, and trade disputes have traditionally represented the most visible obstacles facing businesses operating between nations. However, as global trade enters a new phase, Italian exporters are now encountering a different set of challenges which often have a greater impact on competitiveness than tariffs themselves.

HMRC has launched a consultation on simplifying treaty relief from withholding tax on interest paid overseas, acknowledging that the current system is complex and outdated. The consultation proposes allowing taxpayers to self-assess whether treaty relief applies, moving away from the cumbersome advance treaty application process that can take over a year to complete.

The UK's new International Controlled Transactions Schedule (ICTS) will fundamentally transform how HMRC assesses transfer pricing risks, shifting from documentation-focused reviews to data-driven analysis powered by AI and advanced analytics. With mandatory filing beginning January 1, 2027, multinational enterprises must prepare to provide detailed, standardized information about cross-border related party transactions, facing unprecedented scrutiny and visibility of their transfer pricing arrangements.