Trust and estate tax returns
In its latest one-to-many campaign, HMRC is writing to trusts that may have made an error in their most recent trust and estate tax return by indicating they were not accumulation or discretionary trusts. The nature of the trust can determine the rate at which it pays income tax, with accumulation or discretionary trusts generally paying tax at higher rates than other trusts.
In the letter, HMRC says that the trust’s name indicates that it is an accumulation or discretionary trust, although HMRC acknowledges that a trust’s circumstances can change over time. The letter sets out the action to be taken and sets a deadline of 2 November 2026.
Further information
HMRC service performance
HMRC has updated its performance data for the year to 31 March 2027 to include July 2026. The figures for telephone contact and correspondence response time in July show an improvement on the first three months of 2026-27.
Anti-avoidance information notices
HMRC has published guidance on the new anti‑avoidance information notice powers to obtain information and documents from persons HMRC reasonably suspects are connected with the promotion or facilitation of tax avoidance (s177-208, Finance Act 2026).
New VAT guidelines for compliance
HMRC has published guidelines for compliance (GfC) 20: Help with VAT on fund management services. HMRC says that GfC 20 is “designed to help businesses determine the correct VAT treatment of outsourced fund management services, including whether services should be treated as single or multiple supplies”.
Further information
Latest developments for charities
HMRC has published the latest editions of its newsletters for charities and for community amateur sports clubs (CASCs). The newsletters:
- highlight a new HMRC video that explains the Gift Aid rules for charities and donors;
- provide an update on changes to the process for when charities and CASCs claim Gift Aid and tax back on their other income; and
- explain that, due to changes to HMRC’s internal systems, HMRC’s helpline may need to take additional steps to confirm a caller’s identity.
Carbon border adjustment mechanism
Regulations have been laid that provide for the following in connection with the carbon border adjustment mechanism (CBAM):
- the calculation of embodied emissions;
- the monitoring and verification of emissions data; and
- the record keeping requirements.
Separately, regulations have been laid that confirm that CBAM will commence on 1 January 2027.
The government’s policy paper explains the statutory framework for CBAM.
Further information
How to build better tax system
ICAEW outlines the five institutional pillars needed to ensure the proper functioning of the UK tax system.
Tax Faculty
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