Tax E-News – November 2025

Welcome to the November 2025 edition of Tax E-News. We hope that you find this informative. Please contact us if you wish to discuss any matters in more detail.

November 2025

PLANNED INHERITANCE TAX RELIEF RESTRICTIONS FROM APRIL 2026

In Autumn Budget 2024, the Chancellor announced that restrictions to the amount of Agricultural Property Relief (APR) and Business Property Relief (BPR) will apply from 6 April 2026. APR and BPR currently give up to 100% relief from Inheritance Tax (IHT) on qualifying agricultural and business property.
Draft legislation for the restrictions was published in July 2025.

WHAT IS EXPECTED TO HAPPEN?

A new £1m allowance will apply to the combined value of business and agricultural property assets that qualify for 100% relief under APR or BPR. The new allowance is in addition to the existing IHT nil-rate bands and exemptions. 

Where the combined value of business and agricultural property assets exceeds the £1m allowance, the rate of relief will be reduced to 50% on the value of any qualifying relievable property over the £1m allowance. […]

WHAT IS THE IMPACT OF THE RESTRICTION?

A simple example would be an individual whose estate includes shares in an unquoted trading company valued at £2 million. Under the current rules, 100% BPR would be available, […]

WHAT CAN BE DONE NOW?

It is impossible to plan effectively until the potential tax exposure is known, so the first step is to establish the potential exposure to IHT as a result of the changes and estimate the scale of any IHT liabilities which may arise from 6 April 2026. […]

MAKING TAX DIGITAL: ADVICE FOR DIGITALLY EXCLUDED TAXPAYERS

HMRC has published long-awaited guidance on how digitally excluded individuals should apply for an exemption from Making Tax Digital (MTD) for Income Tax. Gaining HMRC’s agreement that a person is digitally excluded is essential.

WHAT DOES ‘DIGITALLY EXCLUDED’ MEAN?

The MTD legislation defines digitally excluded individuals as those who are unable to use electronic communications or keep electronic records due to their religion, age, disability, location, or any other reason. […]

APPLYING FOR EXEMPTION DUE TO DIGITALLY EXCLUDED STATUS

To apply for digital exclusion, you or your representative should either call HMRC’s self-assessment general enquiries line (0300 200 3310) or write to: […]

VAT: WHEN IS A BISCUIT ‘CHOCOLATE COVERED’?

In a recent First Tier Tribunal (FTT) case, Ferrero Ltd v HMRC, the FTT found that Nutella Biscuits are zero-rated for VAT.
VAT legislation provides that biscuits are zero-rated unless they are wholly or partly covered in chocolate or a substance that is similar to chocolate. HMRC argued that the Nutella Biscuits should be standard-rated on the basis that they were covered in a chocolatey substance. […]

PARTIAL WIN FOR TAXPAYER IN SDLT/ATED RELIEF CASE

In a recent Upper Tribunal (UT) case, Investment and Securities Trust Limited v HMRC, the UT found that a company was entitled to Annual Tax on Enveloped Dwellings (ATED) relief as it held an option over a property exclusively for the purpose of developing and reselling that property, in the course of its property development trade. […]

ADVISORY FUEL RATES: ELECTRIC CAR CHARGING

In the previous edition of this newsletter we showed HMRC’s Advisory Fuel Rates (AFRs) applicable from 1 September 2025. You may have noticed that there was a new rate for fully electric vehicles that are charged using public charging facilities. This means that we now have two electric car rates, which from 1 September are as follows:
Where vehicle charged at home: 8p per mile
Where vehicle charged using public chargers: 14p per mile […]

DIARY OF MAIN TAX EVENTS

NOVEMBER  / DECEMBER 2025