The latest Finance Bill, which is officially titled Finance (No. 2) Bill 2024-26, continues its progress through the parliamentary process. The Bill will eventually become Finance Act 2026. Last week the Bill completed Committee Stage on 6 February and is now at Report Stage, the final stage where amendments can be made. Report Stage, the date for which has not yet been set, will be followed by Third Reading in the House of Commons before the Bill moves on to the House of Lords. At Public Bill Committee stage, a range of amendments were made to the Bill details of which are set out in a policy paper published last month. The amendments to the Bill to increase the £1 million allowance for agricultural property relief and business property relief to £2.5 million were previously debated and agreed during the Committee of the Whole House debates which took place on 12 and 13 January 2026.

Revenue has updated its accelerated wear and tear allowances guidance on gas vehicles and refuelling equipment and energy efficient equipment to reflect an extension of these reliefs to 31 December 2030, as provided for by Finance Act 2025.

Revenue has updated its capital acquisitions tax exemptions guidance to reflect the update provided by Finance Act 2025 in relation to retirement benefits. The update confirms that the meaning of a ‘retirement fund’ extends to any remaining balance in an Automatic Enrolment account where the participant dies after reaching pensionable age.

Revenue has published its Q4 2025 service delivery report, outlining key data and insights on real‑time reporting, taxpayers’ online access to information, and the direct engagements initiated by taxpayers during the quarter. The report outlines that 464,085 tax returns were filed via ROS and 2,382,427 LPT transactions were processed in the quarter which is reflective of the relevant deadlines in the quarter. A total of €3.46 billion was repaid by Revenue. In terms of online inquiries, the report confirms that 604,301 MyEnquiries were received by Revenue in the last quarter of 2025 and an estimated response time was applied in 114,909 cases. The report outlines that the estimated response time given was met or exceeded in 64 percent of the responses. A total of 467,162 calls had the ‘hold my place in queue’ service available and the percentage of relevant callers who availed of this service had increased to 19.5 percent from the previous quarter which had been at 14.75 percent.

Revenue has updated its relevant contracts tax (RCT) guidance on relevant operations providing  clarification that, in the case of mixed contracts, it is only the construction services which are within the scope of RCT. Where a mixed contract involves a single consideration, the principal must apportion the consideration to identify the amount relating to the construction services. Examples of mixed contracts are outlined in the guidance, which include the following: A contract for construction services and the supply of land, a contract to supply design and build services, and a contract for the supply and installation of systems in a building or structure. The guidance outlines that in all cases, it is only the construction services which are subject to RCT and VAT reverse charge. In the case of the examples above, the supply of land, design services and the supply of materials are not subject to RCT. The guidance on who is a principal contractor has also been updated to reflect the Finance Act 2025 changes which amended references to housing legislation contained in section 530A TCA1997. The Finance Act 2025 changes did not alter the range of principals who are required to operate RCT.

The Department of Finance and the Department of Public Expenditure and Reform have published the Fiscal Monitor for January 2026 which confirms an Exchequer surplus of €0.1 billion in January. This compares to a surplus of €3.6 billion recorded for January 2025. When receipts arising from the Court of Justice of the European Union (CJEU) ruling in the Apple State Aid case are excluded, a decline of €1.8 billion was recorded in the underlying Exchequer balance.  This reduction is mainly due to transfers to the Future Ireland Fund (FIF) and Infrastructure, Climate and Nature Fund (ICNF). Tax receipts collected in January were €8.5 billion, which was €1.7 billion lower than the same period last year. Excluding the once off receipts arising from the CJEU ruling in the Apple State aid case, total tax receipts were up slightly on last year, by 0.6 percent. Income tax receipts of €3.0 billion were recorded in January, one percent ahead of January 2025. Corporation tax receipts for January 2026 were €58 million reflective of the fact that January is not generally a significant month for corporation tax. However, January is generally that strongest VAT month of the year as it includes the Christmas trading period and receipts of €4.2 billion were collected in the month, up by 3.3 percent compared to January 2025. Commenting on the figures, Tánaiste and Minister for Finance, Simon Harris said: “The January returns show that receipts were up by around 2 per cent once technical factors are accounted for. VAT receipts in January – which capture the Christmas period – were solid, pointing to the underlying strength in our economy. Income tax growth was slightly lower, which may in part reflect more taxpayers claiming reliefs. More broadly, our labour market remains in good shape, with average wage growth of around 4 to 5 percent in recent quarters and wages continuing to rise at a level well above inflation”.

Last week we highlighted that the 2025 Autumn Budget launched a Call for Evidence on tax supports for entrepreneurs to which the Institute will be responding. This is focused on how UK tax policy can better support investment in innovative high growth companies. There’s still time to share your views on this issue. Contact us by email before close of business on Monday 16 February 2026 to participate. In the Call for Evidence, which is open until 28 February 2026, the Government’s view is that a shortfall in domestic scale-up capital is causing some of the UK’s most innovative companies and founders to move abroad. To address the issue, views are sought on: how effective existing tax supports are, any gaps in the tax system for founders and scaling companies, and options and ideas to improve, rebalance, and better target current supports that would allow the Government to fill these gaps where needed.  A number of changes were made to several of the UK’s tax advantaged venture capital schemes in the 2025 Autumn Budget which aim to enable larger and more established companies to continue to qualify to use the schemes. However, the Call for Evidence notes that these changes “take the existing schemes as far as possible within their current design”. As a result, the government is keen to consider how it could provide more targeted and effective support which also represents good value for money for the taxpayer.   

HMRC is seeking expressions of interest from agents who would like to contribute to the development of a journey that accurately reflects the key challenges they face when supporting clients through VAT and Self-Assessment setup. This work will be focused on the early stages of the journey; i.e. awareness, education, and registration. By actively engaging with agents, HMRC’s aim is to ensure the journey is a true and accurate representation of real taxpayer and agent experiences. Although HMRC recognises that agents already provide valuable feedback via various channels, this particular initiative offers an additional opportunity to collaborate with HMRC to identify process improvements and enhance the overall taxpayer experience. Any agent wishing to express an interest in participating should email customerengagementforums@hmrc.gov.uk  by 17 February 2026.

In this week’s detailed miscellaneous updates which you can read more about below, HMRC has sent information about the removal of certain employment expenses and higher rate gift aid relief as a result of its annual coding process, and the Exchequer Secretary to the Treasury (XST) has made a statement to Parliament on the reform of Pillar Two. HMRC has also asked us to highlight an increase in suspicious activity concerning email scams targeting agents. In other news this week: Edition 3 of HMRC’s Ready Steady File!, the newsletter which provides the latest information on its Making Tax Digital for income tax testing programme, was published last month, The House of Commons Library has published a research briefing ‘Taxation of state pension’, The minutes from the most recent meeting of the Guidance Strategy Forum are available, The latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available for booking. Spaces are limited, so take a look now and save your place, and Check HMRC’s online services availability page for details of planned downtime and the online services affected. Annual coding process HMRC has sent the below information on its annual coding process which has removed employment expenses and gift aid higher rate relief from selected taxpayers from April 2026.   Employment expenses For taxpayers that have employment expenses over £120 coded (i.e. their tax code has been increased for these), their codes have been amended from 2026/27 to remove these if they meet one of the following criteria: they have no current PAYE income, or there is an employment gap of a full tax year since the employment expense was claimed, or they have not had any self-assessment (SA) footprint since 2021/22, or the employment expenses within their code are higher than their 2022/23 SA return. If HMRC has data that indicates that the taxpayer’s circumstances have changed since they applied for relief for employment expenses, HMRC is taking action to correct that tax code. Higher rate gift aid relief For taxpayers that have higher rate gift aid relief coded, their codes have been amended to remove the relief from 2026/27 if they meet all of the following criteria:    the same amount of gift aid relief has been coded for at least three years, and  there has been no SA footprint for at least three years.  As the amount coded has not changed for at least three years, HMRC’s view is that it is highly unlikely that the taxpayer has claimed or confirmed this relief via telephone, webchat, or in writing. This is because HMRC’s research indicates that the majority of regular charitable donations do not continue beyond 12 to 18 months.   If the taxpayer believes that they remain entitled to gift aid higher rate relief and/or employment expenses from 2026/27 and that these should not have been removed from their tax code, they should contact HMRC directly to discuss.   Pillar Two reforms The XST Dan Tomlinson has made a statement to Parliament which welcomes the package of reforms to Pillar Two which was approved recently by the OECD/G20 Inclusive Framework on BEPS. In the statement the XST said that these bring “certainty and stability” for UK businesses. The statement also confirms that measures to amend the UK’s Pillar Two will be subject to technical consultation and will then be brought forward in the next Finance Bill. Any changes will apply for accounting periods beginning on or after 1 January 2026. Email scams targeting agents HMRC has asked us to highlight a current email scam which specifically targets tax agents. The email claims to be from HMRC and asks the recipient to update their anti-money laundering supervision registration details. HMRC’s advice is to always protect yourself from scams by accessing HMRC’s online services for tax agents directly on GOV.UK. If you receive an unexpected phone call, text, or email claiming to be from HMRC, don’t let yourself be rushed. Before sharing any personal information, take a moment to check GOV.UK to see if the contact is genuine. HMRC will only ever email you from an email address that ends in gov.uk such as in the following examples: @hmrc.gov.uk, @tax.service.gov.uk, @advice.hmrc.gov.uk, and @updates.hmrc.gov.uk. Gov.uk will only feature at the end of an email address, and never in the middle. If you’ve received a suspicious email, text, or phone call please report it to HMRC by: forwarding text messages to 60599, forwarding emails to phishing@hmrc.gov.uk, or visiting GOV.UK to report a phone call.

In this week’s cross-border trading corner, we bring you the latest guidance updates and publications. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. The Government’s Borders Directorate Communications team has also sent a reminder email about the European Commission’s announcement in December of intensified controls and checks on food, animal and plant products entering the EU.  Miscellaneous guidance updates and publications This week’s miscellaneous guidance updates and publications are as follows: CDS Declaration Completion Instructions for Imports, UK Trade Tariff: duty suspensions and autonomous tariff quotas, Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS), Report a problem using the Customs Declaration Service, Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS), Search the register of customs agents and express operators, What you can do if things are seized by HMRC or Border Force, Bringing commercial goods into Great Britain in your baggage, Simplified rates for bringing personal goods into the UK, External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, and Maritime ports and wharves location codes for Data Element 5/23 of the Customs Declaration Service.  

A new report from Accountancy Europe highlights the challenges facing small and medium-sized enterprises (SMEs), and their advisers, in complying with their tax compliance obligations. It also provides practical guidance on how to manage and mitigate tax risk.

On 9 February 2026, Commissioner Wopke Hoekstra, responsible for taxation, will appear in front of the ECON committee and FISC subcommittee. This meeting will provide an  opportunity to discuss the relevant aspects of the 2026 Commission Work Programme, including the tax-related legislative proposals that the Commission intends to withdraw.