Tax News Catchup

Whistleblowing 
Payments to informers by HMRC were unfavourably compared to those by the IRS in August 2023 and March 2025.  
Now HMRC has developed a potentially more generous scheme.  
Unfortunately, we will have to wait a while to find out if the new system reaps better rewards – at least until August 2027 if previous reporting is anything to go by. 
 
Artificial Intelligence 
Our latest commentary was only a fortnight ago but since then the professional bodies have issued guidance for their members and HMRC has issued guidance for software developers.  
The professional guidance in relation to taxation not surprisingly reminds members to check carefully whether results generated by AI are accurate. HMRC’s guidance is slightly more intriguing: it suggests that software should be “designed with strong human oversight and control built in at appropriate stages”. That’s all very well but what is the AI supposed to say? “This is hard stuff and you can’t rely on what I’m giving you. Start again and do it yourself.” That would appear to be an admission of uselessness, which the software developers are unlikely to wish to make. HMRC also suggests that users should be advised to seek help from a tax professional, which would be sensible, particularly if the AI has at least identified the issues, thus saving the taxpayer that part of the professional fees. 
 
Public money circulating 
We have discussed this too often to pick a favourite. To summarise, public bodies spend a lot on litigation about VAT in particular. Since this is all public funding going in a circle, is that a good use of taxpayers’ money? 
The Supreme Court has given an opinion recently. It said: 
“Although on the face of it the consequences of arrangements by which VAT is paid over by one public body (the Trust) to another (HMRC) may be thought not to matter because they are ultimately no more than a means of recirculating or reallocating revenue at national level, it is important to recognise the purpose of imposing VAT on services provided by state and other public bodies. The principal reason for this is that the taxation of publicly performed economic activities serves to prevent distortions of competition arising from VAT. This follows from the fact that public bodies would enjoy a competitive advantage if their activities were not subject to VAT but competing services provided by private economic operators were subject to VAT.” 
To which the counterargument is that prices are set by market forces and public bodies are as beholden to that fact as everybody else. Moreover, if public bodies have the option of subsidising provision without falling foul of competition law, why should VAT law prevent it? 
 
Loan charge 
And finally, an update to our most recent comments on the loan charge.  
A final report has been issued by the Independent Loan Charge Review. The proposals go a long way to helping many of the affected taxpayers but those who have already settled may feel put out by the generous terms now available in what will seem like a reward for ignoring various “final” offers in the past.