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Finance Act 2026

Type Public General Act

Publication 2026-03-18

Last updated 2026-10-01

State In force

Department Statute Law Database

Source legislation.gov.uk

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(2) In consequence of the amendments made by subsection (1), in section 4A of that Act (announcement of fiscally significant measures), in subsection (7), in the definition of a “section 4(3) report”, omit “and an assessment”.

(3) The amendments made by this section have effect in relation to the financial year beginning with April 2025 and subsequent financial years.

Provision of data by third parties

Data-gathering

255

Schedule 23 contains provision about requiring data-holders to provide data to His Majesty’s Revenue and Customs on an ongoing basis.

Making tax digital

Persons on whom digital reporting requirements may be imposed

256

(1) Schedule A1 to TMA 1970 (as inserted by section 60 of F(No.2)A 2017) is amended as follows.

(2) For the heading of Part 1 substitute “Introduction”.

(3) For paragraphs 1 to 4 and the cross-heading before paragraph 1 substitute—

(A1) (1) This Schedule confers powers on the Commissioners to make regulations requiring or authorising certain persons and certain partnerships (“relevant persons” and “relevant partnerships”) to take certain steps relating to digital reporting and record-keeping. (2) This Part of this Schedule contains introductory provision, in particular explaining what is meant by a “relevant person” and a “relevant partnership”. (3) Part 2 of this Schedule contains the powers to make regulations and sets out the penalties for non-compliance with certain obligations which may be imposed by the regulations. (4) Part 3 of this Schedule contains provision about exempting relevant persons or relevant partnerships from requirements imposed by the regulations. (5) Part 4 of this Schedule contains supplementary provision. (1) (1) For the purposes of this Schedule a person is a “relevant person” if the person is carrying on or has carried on a relevant activity. (2) A “relevant activity”, in relation to a person, means any activity which may give rise to profits or other income for which the person would be liable to income tax chargeable under Part 2 or Part 3 of ITTOIA 2005 if the person were UK resident. (3) But the following activities are not relevant activities— (a) any activity carried on in partnership; (b) any activity carried on by the trustees of a charitable trust or the trustees of an exempt unauthorised unit trust (within the meaning of the Unauthorised Unit Trusts (Tax) Regulations 2013 (S.I. 2013/2819)); (c) the underwriting business of a member of Lloyd's (within the meaning of section 184 of the Finance Act 1993); (d) holding shares in respect of which a distribution may be made which is chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of section 548(6) of CTA 2010 (distributions to shareholders in real estate investment trusts); (e) participating in an open-ended investment company which may make distributions chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of regulation 69Z18 of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964) (property income distributions). (2) (1) For the purposes of this Schedule a partnership is a “relevant partnership” if one or more of the partners is an individual, unless all of the activities of the partnership which may give rise to profits or income are activities falling within sub-paragraph (2). (2) The following activities fall within this sub-paragraph— (a) the underwriting business of a Lloyd's partnership (as defined in section 184(1) of the Finance Act 1993); (b) holding shares in respect of which a distribution may be made which is chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of section 548(6) of CTA 2010 (distributions to shareholders in real estate investment trusts); (c) participating in an open-ended investment company which may make distributions chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of regulation 69Z18 of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964) (property income distributions).

(4) For paragraph 6 (interpretation) substitute—

(6) In this Part of this Schedule “business”— (a) in relation to a relevant person (see paragraph 1), means the relevant activity or activities that the person is carrying on or has carried on, and (b) in relation to a relevant partnership (see paragraph 2), means the activity or activities of the partnership that may give rise to profits or income and do not fall within paragraph 2 (2).

(5) In paragraph 7 (periodic updates), in sub-paragraph (1), for “person or partnership to whom this Schedule applies” substitute “relevant person or relevant partnership”.

(6) In paragraph 10 (partnership return), in sub-paragraph (1), for “partnership to which this Schedule applies” substitute “relevant partnership”.

(7) In paragraph 11 (record-keeping), in sub-paragraph (1), for “person or partnership to whom this Schedule applies” substitute “relevant person or relevant partnership”.

(8) In paragraph 18 (regulations), in sub-paragraph (3) for “person or partnership to whom this Schedule applies” substitute “relevant person or relevant partnership”.

(9) The amendments made by this section come into force on the same day as section 60 of F(No.2)A 2017 comes into force.

Exemptions from digital reporting requirements

257

(1) Part 3 of Schedule A1 to TMA 1970 (as inserted by section 60 of F(No.2)A 2017) is amended as follows.

(2) In paragraph 14 (exemption for the digital excluded), after sub-paragraph (1) insert—

(1A) The regulations may provide that where the Commissioners are satisfied that a person or partnership is digitally excluded, prior requirements imposed on the person or partnership are to be treated as never having been imposed. (1B) In sub-paragraph (1A) “prior requirements” means requirements imposed by regulations under paragraphs 7, 9 and 11 which are required to be complied with before the date on which the Commissioners are satisfied that the person or partnership is digitally excluded.

(3) In paragraph 15 (further exemptions)—

(a) in sub-paragraph (1), at the end insert “, including exemptions the conditions of which are to be taken to be satisfied only where the Commissioners are satisfied as to specified matters”;

(b) after sub-paragraph (2) insert—

(3) The regulations may provide that where the conditions of a further exemption are met by a person or partnership, prior requirements imposed on the person or partnership are to be treated as never having been imposed. (4) In sub-paragraph (3) “prior requirements”, in relation to a further exemption, means requirements imposed by regulations under paragraphs 7, 9 and 11 which are required to be complied with before the date on which the conditions of the further exemption are met. (5) The regulations may allow any exemption for which the regulations may provide to be given by means of a specific or general direction given by the Commissioners.

(4) The amendments made by this section come into force on the same day as section 60 of F(No.2)A 2017 comes into force.

Returns to be delivered by electronic communications etc.

258

(1) Schedule A1 to TMA 1970 (digital reporting and record-keeping) (as inserted by section 60 of F(No.2)A 2017) is amended as follows.

(2) Omit paragraph 8.

(3) For paragraph 9 and the cross-heading before it substitute—

(9) The Commissioners may by regulations require or authorise the use of electronic communications for the delivery by a relevant person of — (a) a return required by section 8(1)(a) or 8A(1)(a) of this Act; (b) any accounts, statements and documents required by section 8(1)(b) or 8A(1)(b) of this Act; (c) a notice amending a return under section 9ZA of this Act.

(4) In paragraph 13 (electronic communications and records: supplementary powers)—

(a) in sub-paragraph (1), omit “, 8”;

(b) in sub-paragraph (2), before paragraph (a) insert—

(za) as to the means of electronic communication to be used for providing information;

(5) In paragraph 14 (exemptions for the digitally excluded), in sub-paragraph (1)(a), for “8” substitute “9”.

(6) Schedule 14 to F(No.2)A 2017 is repealed.

(7) In consequence of the repeal made by subsection (6), in section 61 of F(No.2)A 2017—

(a) omit subsection (1);

(b) in subsection (2), omit “or Schedule 14”;

(i) for “(1)” substitute “(2)”;

(ii) omit “and Schedule 14”.

(8) The amendments made by subsections (2) to (5) come into force on the same day as section 60 of F(No.2)A 2017 comes into force.

Penalties: amendments consequential on section 258 etc

259

(1) Schedule 24 to FA 2021 (penalties for failure to make returns etc) is amended as follows.

(2) In paragraph 2 (returns), in the Table—

(a) in the entry in item 1, in columns A and B—

(i) in paragraph (1), for “return under section 8” substitute “return, accounts, statements or documents required under section 8”;

(ii) omit paragraph (2);

(b) in the entry in item 2, in columns A and B—

(i) in paragraph (1), for “return under section 8A” substitute “return, accounts, statements or documents required under section 8A”;

(ii) omit paragraph (2);

(d) in the entry in item 3, in column A—

(i) in paragraph (1), for “return under section 12AA(2)(a) or (3)(a)” substitute “return, accounts, statements or documents required under section 12AA(2) or (3)”;

(ii) omit paragraph (2).

(3) In paragraph 2 (returns), omit sub-paragraphs (3) and (4).

(4) In paragraph 5 (liability to penalty points)—

(a) in sub-paragraph (2)—

(i) in the opening words for “the following groups of returns” substitute “group 4A, 4B or 4C”;

(ii) omit paragraphs (a) and (b);

(b) omit sub-paragraph (4).

(5) In paragraph 6 (award of penalty points), in sub-paragraph (3)(b), omit “(3) or”.

(6) In paragraph 15, omit sub-paragraph (6).

(7) In paragraph 17 (time limit for assessments), in sub-paragraph (1)(b), omit “(3) or”.

(8) In Schedule 25 to FA 2021 (penalties for deliberately withholding information), in paragraph 1—

(a) in the Table—

(i) for “section 8(1AB)(b)” substitute “section 8(1)(b)”;

(ii) for “section 8A(1AB)(b)” substitute “section 8A(1)(b)”;

(b) omit sub-paragraphs (3) and (4).

(9) The amendments made by subsections (2)(c), (3) and (8)(b) come into force on the day on which this Act is passed.

(10) The other amendments made by this section come into force—

(a) for the purposes for which the Schedule being amended is in force immediately before 1 April 2026, on 1 April 2026, and

(b) for any other purposes, at the same time as the Schedule being amended comes into force for those purposes.

Powers relating to electronic communications: directions

260

(1) In section 132 of FA 1999 (power to provide for use of electronic communications), in subsection (5)(a)—

(a) for “or requirement” substitute “, requirement or other provision (other than provision under subsection (6)(a) or (b))”;

(b) for “or imposed” substitute “, imposed or made”.

(2) In section 135 of FA 2002 (e-filing), in subsection (4)(a)—

(a) for “or requirement” substitute “, requirement or other provision (other than provision under subsection (7)(a) to (ba))”;

(b) for “or imposed” substitute “, imposed or made”.

Power to require digital contact details

261

(1) The Commissioners may by regulations require persons who use an online service provided by HMRC—

(a) to provide specified digital contact details,

(b) to inform HMRC if they cease to use specified digital contact details, and

(2) Regulations under this section may—

(a) make complying with requirements by virtue of this section a condition of using an online service provided by HMRC;

(b) provide for a failure to comply with a requirement by virtue of this section to attract a penalty of a specified amount not exceeding £1,000;

(c) provide that specified enactments relating to penalties imposed for the purposes of any taxation matter (including enactments relating to assessments, review and appeal) are to apply, with or without modifications, in relation to penalties for failures to comply with a requirement by virtue of this section;

(d) specify the way in which a person must provide digital contact details, and inform HMRC if the person ceases to use a digital contact detail, as required by virtue of this section;

(e) allow anything for which the regulations may provide, other than provision under paragraph (b), to be provided by means of a specific or general direction given by the Commissioners.

(3) Regulation under this section may—

(a) make provision in relation to any specified case or description of case;

(b) make provision subject to specified exceptions;

(d) make supplementary, incidental and consequential provision;

(e) make transitional or transitory provision and savings.

(4) The power to make regulations under this section is exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

(5) Where digital contact details have been provided to HMRC in compliance with a requirement by virtue of this section, the functions in connection with which the Revenue and Customs may under section 17 of CRCA 2005 use the digital contact details include any function relating to an online service provided by HMRC, including any function in relation to which provision is made by virtue of section 132 of FA 1999 or section 135 of FA 2002 (electronic communications).

(6) In this section—

“the Commissioners” means the Commissioners for His Majesty’s Revenue and Customs;

“digital contact detail” means email address, mobile telephone number or any other contact detail for the purpose of communicating by digital means;

“HMRC” means His Majesty’s Revenue and Customs;

“the Revenue and Customs” has the meaning given by section 17 of CRCA 2005;

“taxation matter” means anything the collection and management of which is the responsibility of the Commissioners.

(7) References in this section to an online service provided by HMRC include an online service provided on behalf of HMRC.

(8) In relation to an online service provided on behalf of HMRC—

(a) references in this section to providing digital contact details include providing those details to the person providing the service, and

(b) reference in this section to informing HMRC include informing the person providing the service.

Penalties

Penalty points and late submission penalties (power to cancel etc)

262

(1) Schedule 24 to FA 2021 (penalties for failure to make returns etc) is amended as follows.

(2) In paragraph 6, in sub-paragraph (2), for the words from “, and state in the notice” to the end substitute

and, in the notice— (a) state the failure (or failures) in respect of which the penalty point is awarded, and (b) include sufficient information for the person to be able to identify the group of returns for which the penalty point is awarded.

(3) After paragraph 6 insert—

(6A) (1) HMRC may cancel a penalty point awarded under paragraph 6. (2) Where HMRC cancel a penalty point after a notice under paragraph 6(2) in respect of the penalty point is given, they must notify the person and, in the notice— (a) state the failure (or failures) in respect of which the penalty point was awarded, and (b) include sufficient information for the person to be able to identify the group of returns for which the penalty point was awarded. (3) Where HMRC cancel a penalty point before a notice under paragraph 6(2) in respect of the penalty point is given, HMRC is not required to give the notice under paragraph 6(2). (4) Where HMRC cancel a penalty point, any assessment of a penalty under this Schedule for which the person is liable by virtue of the penalty point ceases to have effect (and is to be taken as never having had any effect). (5) The cancellation of a penalty point does not prevent HMRC from subsequently awarding a penalty point for the failure (or failures) in respect of which the cancelled penalty point was awarded. (6) Sub-paragraph (7) applies if— (a) HMRC cancel a penalty point, (b) after that penalty point was given by HMRC and before it was cancelled, the person failed to make a return on or before the due date, and (c) at the time the failure occurred, the person already had the maximum number of penalty points for the group of returns to which that return belongs (see paragraph 5(8)). (7) HMRC may award a penalty point in respect of the failure before the end of the period of 12 months beginning with the day after HMRC cancel the penalty point (and paragraph 6(3) does not apply).

(4) In paragraph 8 (expiry of all penalty points for a group of returns)—

(a) in sub-paragraph (1)—

(i) the words from “at the beginning” to the end become paragraph (a);

(ii) after that paragraph insert

, or (b) if HMRC notify the person before that time that HMRC have decided the points should expire, at the beginning of the day specified in the notice (which may be before the day on which the notice is given).

(b) in sub-paragraph (6) for “this paragraph” substitute “paragraph (1)(a)”;

(7) For the purposes of this paragraph, where— (a) a person fails to make a return, and (b) by virtue of paragraph 19(1) (reasonable excuse) no liability to a penalty point or penalty in respect of the failure arises under this Schedule, the person is to be treated as if they made the return on or before the due date.

(5) After paragraph 16 insert—

(16A) (1) This paragraph applies where HMRC have assessed a penalty for which a person is liable under this Schedule in respect of a failure (or failures) to make a return. (2) HMRC may withdraw the assessment by notice to the person. (3) The withdrawn assessment ceases to have effect (and is to be taken as never having had any effect). (4) But the withdrawal of the assessment does not prevent HMRC from subsequently assessing a penalty for the failure (or failures) mentioned in sub-paragraph (1).

(6) In paragraph 24, in sub-paragraph (4)—

(a) in paragraph (a)(ii), omit “, for a group of returns,”;

(b) in paragraph (b), omit “in the same group”;

(7) For the purposes for which Schedule 24 to FA 2021 is in force immediately before 1 April 2026—

(a) the amendment made by subsection (4)(c) is treated as always having been in force, and

(b) the other amendments made by this section come into force on 1 April 2026.

(8) For the purposes for which the amendments made by this section come into force by virtue of subsection (7)—

(a) the amendments made by subsections (2), (3) and (6) have effect in relation to penalty points awarded on or after 1 April 2026;

(b) the amendments made by subsection (4)(a) and (b) have effect in relation to penalty points whenever awarded;

(9) The amendments made by this section come into force for any other purposes at the same time as Schedule 24 to FA 2021 comes into force for those other purposes.

Assessments of late payment penalties etc.

263

(1) Schedule 26 to FA 2021 (penalties for failure to pay tax) is amended as follows.

(2) In paragraph 16 (assessments), in sub-paragraph (3)(c), for “the period to which the penalty relates” substitute “, where the penalty is assessed under paragraph 8, the period by reference to which the penalty has been calculated”.

(3) After paragraph 17 insert—

(17A) (1) This paragraph applies where HMRC has assessed a penalty for which a person is liable under this Schedule in respect of a failure to pay the tax due. (2) HMRC may withdraw the assessment by notice to the person. (3) The withdrawn assessment ceases to have effect (and is to be taken as never having had any effect). (4) But the withdrawal of the assessment does not prevent HMRC from subsequently assessing a penalty for the failure mentioned in sub-paragraph (1).

(4) In paragraph 18 (time limit for assessments), in sub-paragraph (2), omit the words from “(that is to say” to the end.

(5) In section 16 of the Social Security Contributions and Benefits Act 1992 (application of Income Tax Acts and destination of Class 4 contributions), in subsection (1)(f), for the words from “and 25” to the end substitute “to 26 to the Finance Act 2021 (penalties)”.

(6) The amendments made by subsections (2) to (4) come into force on 1 April 2026 for the purposes for which Schedule 26 to FA 2021 is in force immediately before 1 April 2026 and have effect in relation to penalties assessed on or after 1 April 2026.

(7) The amendments made by subsections (2) to (4) come into force for any other purposes at the same time as Schedule 26 to FA 2021 comes into force for those other purposes.

(8) The amendment made by subsection (5) comes into force—

(a) for the purposes for which paragraph 13 of Schedule 27 to FA 2021 is in force immediately before 1 April 2026, on 1 April 2026;

(b) for any other purposes, at the same time as that paragraph comes into force for those other purposes.

Penalties for failure to pay tax due on further appeal

264

(1) In paragraph 1 of Schedule 56 to FA 2009 (penalty for failure to make payments on time), in item 18 of the Table—

(a) in column 3, after “under section 55” insert “or 56(3)(b)”;

(b) in column 4, after “or (9)” insert “or section 56(3)(b)”.

(2) In paragraph 1(1) of Schedule 26 to FA 2021 (penalties for failure to pay tax), in item 1 of the table relating to income tax or capital gains tax, in columns 2 and 3, after “section 55” insert “or 56(3)(b)”.

(3) The amendment made by subsection (1) has effect in relation to amounts that become payable on or after 1 April 2026.

(4) The amendment made by subsection (2) comes into force—

(a) for the purposes for which the table relating to income tax or capital gains tax in paragraph 1(1) of Schedule 26 to FA 2021 (penalties for failure to pay tax) is in force immediately before 1 April 2026, on 1 April 2026;

(b) for any other purposes, at the same time as that table comes into force for those other purposes.

Failure to deliver company tax returns

265

(1) In paragraph 17 of Schedule 18 to FA 1998 (failure to deliver company tax return: flat-rate penalty)—

(a) in sub-paragraph (2)—

(i) in paragraph (a), for “£100” substitute “£200”;

(ii) in paragraph (b), for “£200” substitute “£400”;

(b) in sub-paragraph (3), in the opening words—

(i) for “£500” substitute “£1000”;

(ii) for “£1000” substitute “£2000”;

(5) The Commissioners for His Majesty’s Revenue and Customs may by regulations amend sub-paragraph (2) or (3) so as to increase or decrease the amount of a penalty for the time being specified in those sub-paragraphs. (6) Regulations under sub-paragraph (5) may include transitional and saving provision. (7) A statutory instrument containing regulations under sub-paragraph (5) which increase the amount of a penalty by more than is necessary to reflect changes in the value of money may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(2) The amendments made by subsection (1)(a) and (b) have effect in relation to a failure to deliver a company tax return for which the filing date is on or after 1 April 2026.

Advance tax clearances

Clearances

266

(1) An HMRC officer may, on the application of a qualifying person and if the officer considers it appropriate, give a clearance (an “advance tax clearance”) on how HMRC would decide, in relation to a qualifying investment project, questions relating to—

(a) corporation tax;

(b) value added tax;

(d) income tax;

(e) the PAYE Regulations;

(f) the construction industry scheme.

(2) An investment project is a “qualifying investment project” if it is expected to result in at least £1 billion of UK expenditure.

(3) The reference here to “UK expenditure” is to expenditure on—

(a) goods, intangible assets, or services (other than the provision of financing), which are used or consumed in, or

(b) immovable property in,

the United Kingdom or the UK sector of the continental shelf.

(4) Any apportionment of expenditure between expenditure that is and is not UK expenditure is to be made on a just and reasonable basis.

(5) A person is a “qualifying person”, in relation to a qualifying investment project, if the person will incur (or is incurring) the UK expenditure for the purpose of the project or if the person—

(a) controls, or will control, such a person,

(b) is a member of a consortium which owns, or will own, such a person,

(d) is a partner in a partnership and those partners together control, or will control, such a person.

(6) Where there is more than one qualifying person in relation to an investment project, an application under this section must be made by one only of them with the agreement in writing of the other qualifying persons in relation to the project in existence at the time the application is made.

(7) In this section—

“company” has the meaning given by section 1121 of CTA 2010;

“construction industry scheme” means Chapter 3 of Part 3 of FA 2004 and provision made under or in connection with that Chapter;

“control” has the meaning given by section 1124 of CTA 2010;

“intangible asset” means an asset which falls to be treated as an intangible asset in accordance with generally accepted accountancy practice (within the meaning given by section 1127 of CTA 2010);

“partnership” includes an entity established under the law of a country or territory outside the United Kingdom of a similar nature to a partnership;

“the PAYE Regulations” means the Income Tax (Pay As You Earn) Regulations 2003 (S.I. 2003/2682);

“the UK sector of the continental shelf” means the areas designated by Order in Council under section 1(7) of the Continental Shelf Act 1964;

“United Kingdom” includes the territorial sea adjacent to the United Kingdom.

(8) For the purposes of this section—

(a) a person is a member of a consortium if it is a member of a consortium within the meaning of Part 5 of CTA 2010, and

(b) references to a person jointly controlling a company that is a joint venture are to be read in accordance with those provisions of international accounting standards which relate to joint ventures.

Binding effect

267

(1) An advance tax clearance binds HMRC for a period of 5 years, beginning with the day on which the clearance is given as regards—

(a) the investment project, as described in the clearance, and

(b) the qualifying person or persons specified or described in the clearance only.

(2) But HMRC is not bound so far as—

(a) a change in the law, or

(b) a decision of an appeal court that has become final,

alters how HMRC must decide a question.

(3) In this section, “appeal court” means—

(a) the Upper Tribunal;

(b) the Court of Appeal in England and Wales;

(d) the Court of Appeal in Northern Ireland;

(e) the Supreme Court.

(4) For the purposes of this section, a decision of an appeal court is “final” if it is—

(a) a ruling of the Supreme Court, or

(b) a ruling of another appeal court in circumstances where—

(i) no appeal may be made against the ruling,

(ii) if an appeal may be made against the ruling with permission (or, in Northern Ireland, leave), the time limit for applications has expired and either no application has been made or permission (or leave) has been refused,

(iii) if such permission (or leave) to appeal against the ruling has been granted or is not required, no appeal has been made within the time limit for appeals, or

(iv) if an appeal was made, it was abandoned or otherwise disposed of before it was determined by the court or tribunal to which it was addressed.

Extension

268

(1) An HMRC officer may, on the application of the nominated person and if the officer considers it appropriate, extend (or further extend) by up to 5 years the period for which an advance tax clearance binds HMRC.

(2) The “nominated person” is—

(a) the qualifying person who made the application for the clearance, or

(b) a qualifying person notified to HMRC by the person who is for the time being the nominated person.

Modification

269

(1) If a decision is taken to change an aspect of an investment project for which an advance tax clearance binds HMRC from how it is described in the clearance, or if anything which is set out in the clearance and is material to it ceases to be accurate—

(a) the nominated person must notify an HMRC officer as soon as reasonably practicable after the decision was taken or the thing ceased to be accurate, and

(b) an HMRC officer may, if the officer considers it appropriate, modify or revoke the clearance.

(2) A modification under subsection (1)—

(a) may—

(i) revoke any part of the clearance;

(ii) otherwise adapt the clearance;

(b) does not alter the period for which a clearance binds HMRC.

(3) An HMRC officer may also modify a clearance so that it specifies a person as regards whom it is binding instead of describing the person.

(4) A modification or revocation under subsection (1) or (3)—

(a) may be made on the application of the nominated person or by an HMRC officer on the officer’s own initiative;

(b) takes effect from such time (which may be any time at or after the time at which the clearance was given) as the HMRC officer may determine.

(5) A nominated person is liable to a penalty of £5,000 if the person fails to comply with the duty under subsection (1)(a).

Information

270

(1) An HMRC officer may require a qualifying person to provide, within such period as the officer may specify, such information as may reasonably be required in connection with an, or an application for an, advance tax clearance.

(2) If a qualifying person fails to comply with a duty imposed under this section in connection with a clearance, an HMRC officer may revoke the clearance or any part of it.

(3) The effect of a revocation under this section is that the clearance, or (as the case may be) the part of the clearance, is treated as never having been given.

(4) A qualifying person is liable to a penalty of £5,000 if the person fails to comply with a duty imposed under this section.

Misrepresentation

271

(1) If a qualifying person has provided an HMRC officer with information which is false or misleading—

(a) in, or in connection with, an application for an advance tax clearance, or

(b) otherwise in connection with such a clearance,

an HMRC officer may revoke the clearance.

(2) The effect of a revocation under subsection (1) is that the clearance is treated as never having been given.

(3) A person is liable to a penalty of £10,000 if the person carelessly or deliberately makes a false or misleading statement to an HMRC officer—

(a) in, or in connection with, an application for or in relation to an advance tax clearance, or

(b) otherwise in connection with such a clearance.

Commissioners notice

272

(1) The Commissioners may set out in a notice published by them—

(a) matters on which an HMRC officer may not give an advance tax clearance;

(b) things that an HMRC officer must, may or may not take into consideration in deciding whether it is appropriate to—

(i) give or modify an advance tax clearance in relation to a qualifying investment project or any particular question relating to such a project, or

(ii) extend the period for which an advance tax clearance binds HMRC;

(c) provision about who an HMRC officer must, may or may not include in an advance tax clearance, if given, as the qualifying person or persons as regards whom the clearance is binding;

(d) steps qualifying persons must take before an HMRC officer may give an advance tax clearance;

(e) how to make, the information to be provided in and the documents to be supplied with applications and notifications under sections 266 to 269.

(2) Unless it is prohibited by a notice under this section, nothing in such a notice prevents an HMRC officer taking into consideration things not mentioned in the notice in deciding whether it is appropriate to—

(a) give, or modify, an advance tax clearance, or

(b) extend the period for which such a clearance binds HMRC.

(3) A notice published by the Commissioners under this section may be amended or withdrawn by a further notice.

Powers

273

(1) The Treasury may by regulations made by statutory instrument—

(a) amend section 266 (1)—

(i) to add a tax, or a matter relating to tax, to the matters in relation to which an HMRC officer may give an advance tax clearance, or

(ii) to remove a matter in relation to which an HMRC officer may give such a clearance;

(b) amend section 266 (2) to (4) (definition of qualifying investment project).

(2) Regulations under subsection (1)—

(a) may make transitional and saving provision;

(b) may make incidental or consequential provision amending sections 266 to 272 and 274.

(3) A statutory instrument containing regulations under subsection (1) may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(4) The Treasury may by regulation made by statutory instrument provide that specified enactments relating to penalties imposed in connection with tax (including enactments relating to assessments, review and appeal) are to apply, with or without modifications, in relation to penalties imposed under section 269, 270 or 271.

(5) A statutory instrument containing regulations under subsection (4) is subject to annulment in pursuance of a resolution of the House of Commons.

Interpretation

274

(1) In sections 266 to 273—

“advance tax clearance” means a clearance under section 266;

“HMRC” means His Majesty’s Revenue and Customs;

“HMRC officer” means an officer of Revenue and Customs;

“nominated person” has the meaning given by section 268 (2);

“qualifying investment project” has the meaning given by section 266 (2);

“qualifying person” has the meaning given by section 266 (5).

Cryptoasset reporting framework

Cryptoasset reporting: users and controlling persons resident in the UK

275

(1) The duty under regulation 6 of the Reporting Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025 (S.I. 2025/744) (“the Regulations”) to make a report to HMRC applies to UK reporting cryptoasset service providers in respect of information relating to cryptoasset users resident in the United Kingdom, or who have controlling persons that are resident in the United Kingdom, as it applies in respect of cryptoasset users that are reportable users or that have controlling persons that are reportable persons.

(2) The duty under regulation 8 of the Regulations (notification to reportable users and reportable persons) applies where, by virtue of subsection (1), a UK reporting cryptoasset service provider must make a report to HMRC under regulation 6 of the Regulations that will include information relating to a cryptoasset user resident in the United Kingdom, or who has a controlling person that is resident in the United Kingdom, as it applies where such a service provider must make a report under regulation 6 of the Regulations that will include information relating to a reportable user or a reportable person, but—

(a) reading references in regulation 8 of the Regulations to a reportable user or a reportable person as references to the cryptoasset user resident in the United Kingdom, or who has a controlling person that is resident in the United Kingdom, and

(b) as if regulation 8(1)(b) of the Regulations were omitted.

(3) For the purposes of this section—

(a) regulation 2 of the Regulations (interpretation) applies as it applies for the purposes of the Regulations,

(b) “resident” means resident for income tax purposes or corporation tax purposes.

(4) For the purposes of this section, and the Regulations as they apply for the purposes of this section, regulation 3 of the Regulations (UK reporting cryptoasset service provider) is to be read as if the reference in regulation 3(1)(b) to Section I(C) to (H) of the rules were a reference to Section I(C) to (G) of the rules.

International cryptoasset reporting framework: connected matters

276

The reference in section 349 of F(No. 2)A 2023 (international arrangements for exchanging information) to making regulations in connection with international tax compliance arrangements includes, in the case of any provision of the OECD Crypto-Asset Reporting Framework, published in 2022, such regulations making provision which—

(a) is similar or connected to regulations under that section giving effect to the provision of the Framework, and

(b) is for cases to which the provision of the Framework does not apply.

Miscellaneous

Stamp duty: piloting of digital service etc

277

(1) The Treasury may by regulations make provision for the purpose of enabling or facilitating the testing by HMRC of modern stamp tax procedures by applying such procedures to relevant transfers on sale.

(2) A transfer on sale is “relevant” for the purposes of this section if—

(a) the transfer is executed in a prescribed period,

(b) the purchaser—

(i) is a designated person, and

(ii) does not determine that the transfer is to be excluded from the procedures mentioned in subsection (1),

(d) the transfer meets any other conditions that may be prescribed.

(3) “Modern stamp tax procedures” means any procedure, technology, system or process that could be used for the payment, collection, recovery or other administration of a future tax replacing stamp duty under which the purchaser in relation to a transfer on sale is liable to the tax.

(4) Regulations under this section may—

(a) provide that, if a designated person complies with prescribed requirements in relation to a relevant transfer on sale, a prescribed step required or contemplated by any legislation relating to stamp duty is to be treated as having been carried out;

(b) make further provision about designations under subsection (2)(b)(i);

(c) treat designated persons as liable to stamp duty on any relevant transfers on sale in respect of which they are the purchaser;

(d) confer functions on HMRC, including functions involving the exercise of a discretion.

(5) Regulations under this section may—

(a) enable the claiming by designated persons of reliefs or refunds in respect of relevant transfers on sale;

(b) make provision about the keeping of records;

(d) require any person liable by virtue of this section to pay stamp duty on a relevant transfer—

(i) to notify HMRC and submit a self-assessed return;

(ii) to comply with any request of HMRC to provide information in connection with the relevant transfer;

(e) make provision about enforcement (including provision for the imposition of civil penalties or other sanctions for a failure to comply with requirements under the regulations);

(f) include provision about—

(i) the information to be included in a self-assessed return;

(ii) the form of, and method of submitting, such a return;

(g) require designated persons to use a prescribed facility for the making of payments or the submission of returns;

(h) provide for Schedule 36 to FA 2008 (information and inspection powers) to have effect as if in paragraph 63(1) of that Schedule (meaning of “tax”), after paragraph (g) there were inserted—

(ga) stamp duty on a relevant transfer on sale (as defined in section 277 (2) of FA 2026),

(6) Regulations under this section may provide for any provisions of TMA 1970 specified in the regulations to apply in relation to stamp duty on relevant transfers as they apply in relation to a tax within the meaning of that Act, subject to any modifications that may be prescribed.

(7) Regulations under this section may—

(a) disapply or otherwise modify any enactment;

(b) make different provision for different purposes;

(8) In the case of a transfer on sale executed by two or more joint purchasers, the reference in subsection (2)(b) to the purchaser is to be read as a reference to the purchaser who is first named on the transfer.

(9) In this section—

“designated person” means a person designated by HMRC with the person’s consent;

“HMRC” means His Majesty’s Revenue and Customs;

“prescribed” means prescribed in regulations under this section.

(10) A power to make regulations under this section is exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Oversight of HMRC tax enforcement functions in Northern Ireland

278

(1) After section 28 of CRCA 2005 (complaints and misconduct relating to England and Wales) insert—

(28A) (1) The Commissioners for His Majesty’s Revenue and Customs and the Police Ombudsman for Northern Ireland may enter into an agreement to establish procedures which correspond to, or are similar to, any of those established by virtue of Part 7 of the Police (Northern Ireland) Act 1998. (2) An agreement under this section must only relate to the exercise, in Northern Ireland, of functions of enforcement relating to tax by the Commissioners and officers of Revenue and Customs. (3) Where no procedures as mentioned in subsection (1) are in force in relation to His Majesty’s Revenue and Customs, the Treasury may by regulations establish such procedures. (4) An agreement under this section may be varied or terminated by a further agreement entered into by the Commissioners and the Ombudsman. (5) Nothing in any other statutory provision prevents the Commissioners and officers of Revenue and Customs from carrying into effect procedures established by virtue of this section. (6) In this section, “tax” includes any other obligation to pay an amount to His Majesty’s Revenue and Customs. (7) Regulations under subsection (3) are to be made by statutory instrument and are subject to annulment in pursuance of a resolution of the House of Commons. (8) Section 72(2) of the Police (Northern Ireland) Act 1998 applies in relation to regulations under this section as it applies in relation to regulations under that Act (reading the reference to the Secretary of State as a reference to the Treasury).

(2) In section 18(2) of that Act (exceptions to confidentiality), after paragraph (g) insert—

(ga) which is made to the Police Ombudsman for Northern Ireland, or a person acting on the Ombudsman’s behalf, for the purpose of a procedure established by virtue of section 28A,

(3) In section 29 of that Act (confidentiality etc), after subsection (3) insert—

(3A) Where the Police Ombudsman of Northern Ireland or a person acting on the Ombudsman’s behalf obtains information from the Commissioners or an officer of Revenue and Customs in the course of a procedure established by virtue of section 28A— (a) the Ombudsman or person may not disclose it without the consent of the Commissioners, and (b) the Ombudsman or person may not use the information for any purpose other than the procedure.

Repeal of obsolete provision in FA 1925 concerning Dominion Governments

279

Section 25 of FA 1925 (which refers to the liability of Dominion Governments to taxation in respect of trading operations and which is obsolete) is repealed.

Repeal of other obsolete provisions and correction of wrong cross-references

280

(1) In Table A in section 660 of ITEPA 2003 (taxable UK benefits), omit the entry relating to bereavement allowance (which is no longer payable).

(2) In Table B in section 677 of that Act (UK social security benefits wholly exempt from tax), omit the following entries to benefits that are no longer payable—

“back to work bonus”,

“bereavement payment”,

“child’s special allowance “,

“council tax benefit”,

“health in pregnancy grant”,

“in-work credit”,

“in-work emergency discretion fund payment”, and

“return to work credit”.

(3) In the Table in paragraph 1(4) of Schedule 24 to FA 2007—

(a) in the entry relating to general betting duty, for “paragraph 2 of Schedule 1 to BGDA 1981” substitute “section 166 of FA 2014”,

(b) in the entry relating to pool betting duty, for “paragraph 2A of Schedule 1 to BGDA 1981” substitute “section 166 of FA 2014”, and

(4) In the Table in paragraph 1 of Schedule 41 to FA 2008, in the entry relating to alcohol duty which refers to section 88 of F(No. 2)A 2023, for “section 88” substitute “section 82”.

Final

Interpretation

281

In this Act the following abbreviations are references to the following Acts—

CAA 2001	Capital Allowances Act 2001
CEMA 1979	Customs and Excise Management Act 1979
CRCA 2005	Commissioners for Revenue and Customs Act 2005
CTA 2009	Corporation Tax Act 2009
CTA 2010	Corporation Tax Act 2010
FA followed by a year	Finance Act of that year
F(No.2)A followed by a year	Finance (No.2) Act of that year
IHTA 1984	Inheritance Tax Act 1984
ITA 2007	Income Tax Act 2007
ITEPA 2003	Income Tax (Earnings and Pensions) Act 2003
ITTOIA 2005	Income Tax (Trading and Other Income) Act 2005
TCGA 1992	Taxation of Chargeable Gains Act 1992
TCTA 2018	Taxation (Cross-border Trade) Act 2018
TIOPA 2010	Taxation (International and Other Provisions) Act 2010
TMA 1970	Taxes Management Act 1970
TPDA 1979	Tobacco Products Duty Act 1979
VATA 1994	Value Added Tax Act 1994
VERA 1994	Vehicle Excise and Registration Act 1994

Short title

282

This Act may be cited as the Finance Act 2026.

Schedule 1 — Property and savings rates of income tax: consequential amendments

Part 1 — Amendments of ITA 2007

1

ITA 2007 is amended as follows.

2

In section 6 (3) (other rates of income tax)—

(a) in paragraph (zb), for “Welsh basic, higher and additional rates” substitute “the Welsh rates”,

(b) after paragraph (zc) insert—

(zd) section 6D (property basic, higher and additional rates),

, and

3

In section 6B (the Welsh basic, higher and additional amounts)—

(a) after subsection (1) insert—

(1A) The Welsh property basic rate, the Welsh property higher rate and the Welsh property additional rate for a tax year are calculated as follows. - Step 1Take the property basic rate, property higher rate or property additional rate. - Step 2Deduct 10 percentage points. - Step 3Add the Welsh rate (if any) set by Senedd Cymru for that year for the purpose of calculating the Welsh basic rate, the Welsh higher rate or the Welsh additional rate (as the case may be).

, and

(b) for the heading substitute “The Welsh rates”.

4

In section 9 (the trust and dividend trust rate)—

(a) after subsection (1) insert—

(1A) The property trust rate is 47%. (1B) The savings trust rate is 47%.

, and

(b) in the heading, after “The trust rate” insert “, property trust rate, savings trust rate”.

5

In section 9A (overview of sections 10 to 15), in the table—

(a) after the second column, insert the following column—

Rates payable on property income
Property rates
Scottish rates
Welsh property rates
Property rates
Property basic rate

, and

(b) in the second column, in the final row, for “Default basic rate” substitute “Savings basic rate”.

6

In section 10 (income charged at the basic, higher and additional rates: individuals), in subsection (4), after the entry relating to section 11C insert—

section 11CA (income charged at the property basic, higher and additional rates: individuals),

section 11CB (income charged at the Welsh property basic, higher and additional rates: individuals),

7

In section 11 (income charged at the default basic rate: non-individuals), in subsection (2)—

(a) at the beginning insert—

section 11CC (income charged at the property basic rate: non-individuals),

section 11DA (income charged at the savings basic rate: non-individuals),

, and

(b) in the entry relating to Chapters 3 to 5 of Part 9, after “charged at” insert “the property trust rate, the savings trust rate or”.

8

In section 11B (income charged at the Welsh basic, higher and additional rates)—

(a) in subsections (1)(a), (2)(a) and (3)(a), for “non-savings income” substitute “neither property income nor savings income”,

(b) omit subsection (4), and

(i) for “Section 16 has” substitute “Sections 16 and 16A have”, and

(ii) for “non-savings income of a Welsh taxpayer” substitute “income of a Welsh taxpayer which is neither property income nor savings income”.

9

In section 11C (income charged at the default basic, higher and additional rates: non-UK resident individuals), in subsection (4), before the entry relating to section 11D insert—

section 11CA (income charged at the property basic, higher and additional rates: individuals),

10

After section 11CA, as inserted by section 6 (3) of this Act, insert—

(11CB) (1) Income tax is charged at the Welsh property basic rate on the income of a Welsh taxpayer which— (a) is property income, and (b) would otherwise be charged at the Welsh basic rate. (2) Income tax is charged at the Welsh property higher rate on the income of a Welsh taxpayer which— (a) is property income, and (b) would otherwise be charged at the Welsh higher rate. (3) Income tax is charged at the Welsh property additional rate on the income of a Welsh taxpayer which— (a) is property income, and (b) would otherwise be charged at the Welsh additional rate. (4) This section is subject to any provisions of the Income Tax Acts which provide for income to be charged at different rates of income tax in some circumstances. (5) Sections 16 and 16A have effect for determining the extent to which the property income of a Welsh taxpayer would otherwise be charged at the Welsh basic, higher or additional rate. (11CC) (1) Income tax is charged at the property basic rate on the income of persons other than individuals which— (a) is property income, (b) would otherwise be charged at the default basic rate, and (c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis). (2) This is subject to— - Chapters 3 to 5 of Part 9 (which provide for some income of trustees to be charged at special trust rates), and - any other provisions of the Income Tax Acts (apart from section 11) which provide for income of persons other than individuals to be charged at different rates of income tax in some circumstances.

11

In section 11D (income charged at the savings basic, higher and additional rates), in the heading, at the end insert “: individuals”.

12

After that section insert—

(11DA) (1) Income tax is charged at the savings basic rate on the income of persons other than individuals which— (a) is savings income, (b) would otherwise be charged at the default basic rate, and (c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis). (2) This is subject to— - Chapters 3 to 5 of Part 9 (which provide for some income of trustees to be charged at special trust rates), and - any other provisions of the Income Tax Acts (apart from section 11) which provide for income of persons other than individuals to be charged at different rates of income tax in some circumstances.

13

In section 12B (individual’s entitlement to a savings allowance), in subsection (8)—

(a) in paragraph (a)(i) and (iv) (which sets out what counts as additional-rate income), after “the additional rate” insert “, property additional rate”, and

(b) in paragraph (b)(i) and (iv) (which sets out what counts as higher-rate income), after “the higher rate” insert “, property higher rate”.

14

In section 14 (income charged at the dividend ordinary rate: other persons)—

(a) in subsection (1)(b), for “the basic rate” substitute “the default basic rate”, and

(b) in the heading, for “other persons” substitute “non-individuals”.

15

In section 15 (income charged at the trust rate and the dividend trust rate)—

(a) after “charged at the trust rate” insert “, the property trust rate, the savings trust rate”, and

(b) in the heading, after “charged at the trust rate” insert “, the property trust rate, the savings trust rate”.

16

In section 16 (savings and dividend income to be treated as highest part of total income), for subsection (1)(zb) substitute—

(zb) the rate at which income tax would be charged on the income of a Welsh taxpayer which is neither property income nor savings income apart from section 11B but taking into account the effect of section 16A,

17

In section 18 (meaning of “savings income”), in subsection (4)(b)—

(a) after “personal representatives” insert “or trustees”, and

(b) for “or 466” substitute “, 466 or 467”.

18

In section 31 (total income: supplementary), in subsection (2), after “the basic rate,” insert “the property basic rate, the savings basic rate,”.

19

In section 55B (transferable tax allowance for married couples and civil partners: entitlement to tax reduction), in subsection (2)(b)—

(a) after “other than the basic rate,” insert “the property basic rate,” and

(b) after “the Welsh basic rate,” insert “the Welsh property basic rate,”.

20

In section 55C (transferable tax allowance for married couples and civil partners: election to reduce personal allowance), in subsection (1)(c)—

(a) after “other than the basic rate,” insert “the property basic rate,” and

(b) after “the Welsh basic rate,” insert “the Welsh property basic rate,”.

21

In section 399B (3) (which provides for relief for finance costs relating to residential property to be given at the basic rate for property partnerships)—

(a) for “BR”, in both places, substitute “PBR”, and

(b) for “basic rate” substitute “property basic rate”.

22

In section 462 (overview of Part 9), in subsection (3) (which explains the provision made by Chapter 3), after “charged at” insert “the property trust rate, the savings trust rate or”.

23

In section 463 (general provision about settlements etc)—

(a) in subsection (1), in the definition of “other income” for the words from “neither” to “nor” substitute “not property income, dividends income or”, and

(b) in subsection (2), after “charged at” insert “the property trust rate, the savings trust rate or”.

24

In section 479 (trustees’ accumulated or discretionary income to be charged at special rates), after subsection (2) insert—

(2A) Income tax is charged on the income at the property trust rate so far as the income is property income. (2B) Income tax is charged on the income at the savings trust rate so far as the income is savings income.

25

In section 481 (other amounts to be charged at special rates for trustees), after subsection (3) insert—

(3A) If the amount is within Type 2, 6 or 7 as set out in section 482, income tax is charged on the amount at the savings trust rate. (3B) If the amount is within Type 5 as set out in section 482, income tax is charged on the amount at the property trust rate.

26

In section 483 (sums paid by personal representatives to trustees), in subsection (1)(b), after “that income at” insert “the property trust rate, the savings trust rate or”.

27

In section 486 (how allowable expenses are to be set against trust rate income)—

(a) in subsection (1), in step 2, after “savings income” insert “, property income”,

(b) in that subsection, in step 5, in paragraph (a), for “the basic rate” substitute “the savings basic rate”,

Step 5A If there are remaining expenses and there is property income— 1. gross up by reference to the property basic rate so much of the remaining expenses as is necessary to give a result equal to the amount of that income, or 2. if there are not enough remaining expenses to give that result, gross them all up by reference to that rate. For the purposes of this step “the remaining expenses” are the allowable expenses so far as they have not been grossed up at Step 3, 4 or 5.

, and

(d) in that subsection, in step 6, in the final sentence, for “or 5” substitute “, 5 or 5A”.

28

In section 503 (how beneficiary’s income is reduced), in subsection (2), omit the “and” before “fourth” and for the entry relating to “fourth” substitute—

fourth, reduce property income (if any), and

fifth, reduce other income (if any).

29

In section 874 (duty to deduct from certain payments of yearly interest), in subsection (2), for “the basic rate” substitute “the savings basic rate”.

30

In section 889 (payments in respect of building society securities), in subsection (4), for “the basic rate” substitute “the savings basic rate”.

31

In section 919 (manufactured interest on UK securities: payments by UK residents etc), in subsection (2), for “the basic rate” substitute “the savings basic rate”.

32

In section 939 (duty to retain bonds where issue treated as payment of interest), in subsection (2), for “the basic rate” substitute “the savings basic rate”.

33

In section 974 (Real Estate Investment Trusts: regulations under section 973), in subsection (1)(a), for “the basic rate” substitute “the property basic rate”.

34

In section 975A (statements about certain payments of interest), in subsection (4)(b), for “the basic rate” substitute “the savings basic rate”.

35

In section 989 (definitions), at the appropriate places insert—

“property additional rate” means the rate of income tax of that name determined pursuant to section 6D,

“property basic rate” means the rate of income tax of that name determined pursuant to section 6D,

“property higher rate” means the rate of income tax of that name determined pursuant to section 6D,

“property income” has the meaning given by section 17A,

“property trust rate” means the rate of income tax specified in section 9(1A),

“savings trust rate” means the rate of income tax specified in section 9(1B),

“Welsh property additional rate” means the rate of income tax of that name determined pursuant to section 6B(1A),

“Welsh property basic rate” means the rate of income tax of that name determined pursuant to section 6B(1A),

“Welsh property higher rate” means the rate of income tax of that name determined pursuant to section 6B(1A),

36

In Schedule 4 (index of defined expressions), at the appropriate places insert—

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