This week’s miscellaneous updates – 2 June 2026

In this week’s detailed miscellaneous updates which you can read more about below, HMRC has published the latest Spotlight which looks at a property business scheme being marketed to landlords, and a VAT brief of relevance to the further education sector has been published.

In addition to the above, readers should also note the following:

• The minutes of the March 2026 Employer and Payroll Group stakeholder forum, which the Institute participates in, have been published,
• The National Insurance Contributions (Employer Pensions Contributions) Act 2026 received Royal Assent on 29 April 2026. This legislation gives HM Treasury the power to make regulations to introduce the £2,000 cap on the National Insurance Contributions exemption for salary sacrificed pension contributions from April 2029,
• HMRC has published a technical note providing a summary of the new  rules for Inheritance Tax on unused pension funds which will apply to deaths on or after 6 April 2027, and finally,
• In a landmark case HMRC has lost is argument in the Professional Game Match Officials Ltd (PGMOL) case. Last month’s judgment ruled in favour of PGMOL when it held that the contracts of football referees officiating matches in the English Football League were contracts for services and not contracts of employment, and as a result that the referees were self-employed.

Latest Spotlight shines light on property schemes

HMRC’s latest Spotlight, number 63a, has been published to warn landlords against using a scheme, sometimes referred to as a hybrid business model, which is being marketed as a way to structure a property business in order to reduce tax. Effectively, the model claims to:

• bypass mortgage interest relief restrictions, thereby falsely allowing increased deductions for mortgage interest for residential properties, and
• reduce the amount of tax payable on profits from their property business

HMRC’s view is that the scheme does not work. The Spotlight therefore warns landlords who use these arrangements that they could end up paying more tax than they tried to avoid, along with interest, penalties and high fees.

The Spotlight explains in detail: 

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

HMRC VAT brief for further education institutions 

HMRC has published Revenue and Customs Brief 3 (2026) following the Court of Appeal  (CoA) decision ‘HMRC v Colchester Institute Corporation [2026] EWCA Civ 363’. In this case, the CoA upheld the decision of the Upper Tribunal that monies received by a further education institution were third party consideration paid by the funding agencies for the supply of education to students. 

HMRC historically took the view that monies received by these institutions from government funding agencies was a grant and therefore the activity it funded was outside the scope of the VAT system. However, Colchester Institute Corporation successfully argued that the monies represented third party consideration paid by the funding agencies for the supply of education to students.

HMRC is not appealing this decision and will consider the decision in consultation with stakeholders. It 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.