Tax news in brief

Property business arrangements 

In Spotlight 63a, HMRC has warned landlords against using a scheme (sometimes referred to as a hybrid business model) that is being marketed as a way to structure a property business to reduce tax liabilities. HMRC’s guidance explains: 

• how the scheme is intended to work;
• why HMRC believes that it does not produce the intended tax savings; and 
• what taxpayers who have used the scheme should do.  

Changes to the electricity generator levy 

In a statement to Parliament, Dam Tomlinson, the Exchequer Secretary to HM Treasury, has announced that the electricity generator levy will be: 

• increased from 45% to 55% from 1 July 2026; and 
• extended beyond its scheduled conclusion in 2028.  

Views on tax adviser authorisation 

HMRC has published research on how taxpayers: 

• work with tax advisers; 
• view the tax adviser authorisation process; and 
• feel about possible changes to the authorisation process, including making authorisation time-bound and introducing granular permissions.  

VAT and further education institutions 

HMRC has published Revenue and Customs Brief 3 (2026) in response to the decision of the Court of Appeal in HMRC v Colchester Institute Corporation [2026] EWCA Civ 363. The Court of Appeal upheld the decision of the Upper Tribunal that monies received by a further education institution represented third party consideration paid by the funding agencies for the supply of education to students. 

In the Brief, HMRC explains that it is not appealing the Court of Appeal’s decision, will consider the decision in consultation with stakeholders, and will announce any policy change in a future brief. HMRC also explains the position for taxpayers who followed the guidance in Revenue and Customs Brief 08/21.