Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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Tax Notes: Soroban Gets Cool Reception on Limited Partner Argument
A Tax Notes report covers the Soroban Capital Partners case, where the court gave a cool reception to the fund's argument that its limited partners should be exempt from self-employment taxes under the limited partner exception. The case tests the boundaries of who qualifies as a limited partner for payroll/self-employment tax purposes, a hotly contested issue for hedge funds and investment partnerships. The court's skeptical stance could have broad implications for fund managers and limited partners seeking to shield income from self-employment taxes, reinforcing IRS positions on active participation in partnership structures.
Manual vs Automated Payroll Software: Which Is Best for SMEs?
This article compares manual and automated payroll software solutions for small and medium-sized enterprises (SMEs), examining the trade-offs between traditional manual payroll processing and modern automated systems. Key considerations include accuracy, compliance with payroll tax obligations, cost, and scalability. Automated payroll software is highlighted for its ability to reduce errors in tax calculations, ensure timely filings, and handle complex payroll tax deductions, while manual processing may suit very small businesses with simple needs. The piece helps SME owners evaluate which approach best manages their payroll tax responsibilities efficiently.
Fiscal Hell or Mirage? What Spain’s Wage Debate Gets Wrong
This article from Tax Justice Network challenges the narrative around Spain's wage and fiscal debate, examining claims about tax burdens on workers and businesses. It critiques arguments that frame Spain as a 'fiscal hell' for employers or high earners, analysing how wage costs, social contributions, and income taxation interact. The piece scrutinises whether tax pressure in Spain genuinely discourages employment or investment, pushing back against rhetoric used to oppose wage increases or progressive taxation. It contextualises Spain's fiscal position within broader European comparisons, arguing the 'fiscal hell' framing misrepresents the data on effective tax rates and labour costs.
2026 CA Day: Upto 50% Off on Tax, Payroll, and ROC Software
SAG Infotech is offering discounts of up to 50% on its tax, payroll, and ROC software products in celebration of CA Day 2026. The promotional offer targets chartered accountants and tax professionals seeking compliance and filing tools. Products covered include tax return preparation, payroll processing, and company secretarial software. This is a commercial software promotion tied to the accounting profession's annual celebration, highlighting the role of tax technology tools in streamlining compliance workflows for Indian CA firms and tax practitioners.
Mumbai ITAT: Typographical Error in Tax Audit Report Cannot Deny PF Deduction if Contribution Was Actually Paid Within Due Date
The Mumbai ITAT ruled that a typographical error in a tax audit report cannot be used to deny a deduction for provident fund (PF) contributions if the actual payment was made within the statutory due date. The tribunal held that the substance of the transaction—timely payment—should prevail over a clerical error in the audit report. This decision protects taxpayers from losing legitimate deductions due to minor documentation errors and underscores that tax authorities must look at actual facts rather than relying on technical defects in reporting documents.
Promotional material: Help with the Apprenticeship Levy and Employment Allowance — connected entities — GfC10
HMRC's GfC10 guidance covers the Apprenticeship Levy and Employment Allowance rules as they apply to connected entities in the UK. Connected companies and charities must share a single Apprenticeship Levy allowance of £15,000 and a single Employment Allowance, requiring coordination among group entities. The guidance clarifies how to determine connected status, allocate allowances, and ensure payroll compliance. This is directly relevant to UK employers managing payroll tax obligations, particularly large groups where misallocation of these allowances could result in underpayment or overclaiming.
Income-tax Act 2025: New TDS and TCS Forms Every Deductor Must Know
This article covers new TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) forms introduced under the Income Tax Act 2025 in India. It details the updated forms that deductors and collectors must use, explaining changes in compliance requirements, filing procedures, and deadlines. The piece is aimed at helping deductors navigate the revised regulatory framework, understand which forms apply to specific transaction types, and ensure accurate withholding tax compliance. The changes are part of India's broader effort to modernize and streamline its direct tax administration under the new income tax legislation.
Uncapping the Payroll Tax Would Be the Largest Tax Increase in Decades—and Still Wouldn’t Save Social Security
The Tax Foundation examines a proposal to remove the payroll tax cap on Social Security contributions, warning it would constitute one of the largest tax increases in modern U.S. history. Currently, earnings above approximately $168,600 are exempt from the Social Security payroll tax. Uncapping this would significantly raise taxes on higher earners but analysis suggests it still would not fully resolve Social Security's long-term funding shortfall. The piece critiques the proposal's effectiveness and economic impact, highlighting that structural reforms beyond revenue increases are needed to ensure the program's solvency over the coming decades.
COUNTERPOINT: Social Security Should Not Be Privatized
This opinion piece argues against privatizing Social Security, contending that the current public system provides reliable, guaranteed benefits that private accounts cannot match. The author highlights risks including market volatility, inadequate retirement savings behavior, and the potential elimination of disability and survivor benefits. From a tax angle, Social Security privatization carries significant payroll tax implications — redirecting payroll contributions to private accounts would undermine the payroll tax funding mechanism, potentially requiring alternative tax revenue or benefit cuts to cover existing obligations.
POINT: Recipe to Convert to a Private Social Security System
This opinion piece outlines a framework for converting the U.S. Social Security system into a private savings model, proposing that payroll tax contributions be redirected into individually owned investment accounts. The author argues this would generate better long-term returns than the current pay-as-you-go structure. The proposal has direct payroll tax implications, as it would fundamentally restructure how Social Security contributions are collected and allocated, raising questions about transition funding, existing beneficiary obligations, and the future role of payroll taxes in financing retirement benefits.
Guidance: Payroll technical specifications: National Insurance
The UK government has published technical specifications guidance for payroll systems relating to National Insurance contributions. This document provides detailed technical requirements for payroll software developers and employers to correctly calculate and process National Insurance contributions within their payroll systems. The guidance ensures compliance with HMRC requirements and supports accurate NI calculations across different employee categories and contribution rates. It is particularly relevant for payroll software vendors, large employers managing in-house payroll, and tax technology providers needing to align their systems with current UK National Insurance rules and reporting standards.
Businesses: Changes are coming to the way you access Business Registration Online
The Canada Revenue Agency (CRA) is updating how businesses access Business Registration Online (BRO), its digital portal for registering for tax accounts including GST/HST, payroll, and corporate accounts. Businesses will need to adapt to new login or authentication methods to continue using the service. This change affects how Canadian businesses manage their tax registrations and maintain compliance with federal tax obligations. The update is part of the CRA's broader effort to modernize and secure its digital infrastructure for business taxpayers.
Policy paper: Directions under section 43E of the Taxes Management Act 1970 and regulation 65A(5) and (6) of the Income Tax (Pay As You Earn) Regulations 2003 and Regulation 189 of the Income Tax (Pay As You Earn) Regulations 2003
HMRC has published a policy paper providing directions under section 43E of the Taxes Management Act 1970 and related PAYE regulations. The directions concern employer obligations under the Pay As You Earn system, specifically addressing reporting requirements and procedural rules for payroll administration. Regulations 65A(5), 65A(6), and 189 of the Income Tax (PAYE) Regulations 2003 govern how employers must handle real-time information submissions and related compliance matters. This technical guidance clarifies HMRC's formal directions to ensure employers meet their statutory payroll reporting obligations under UK tax law.
Mid-Year Payroll Tax Account Checkup
A mid-year payroll tax account checkup article advising employers and payroll professionals to review their payroll tax obligations halfway through the year. Key areas likely include verifying federal and state withholding accuracy, reconciling payroll tax deposits, checking for any legislative changes affecting rates or thresholds, and ensuring compliance with filing deadlines. Mid-year reviews help identify discrepancies before year-end, reducing penalty exposure and avoiding costly corrections. The checkup also covers employee classification, fringe benefit taxation, and ensuring W-2 and 1099 preparation will be accurate, making it a practical compliance guide for US-based payroll administrators and tax practitioners.
Official Statistics: Employment Allowance take-up statistics: 2025 to 2026 tax year estimate
HMRC has released official statistics on Employment Allowance take-up for the 2025 to 2026 tax year. The Employment Allowance allows eligible UK employers to reduce their National Insurance contributions liability by up to a set annual amount. These statistics provide estimates of how many businesses and employers are claiming the allowance, offering insight into the uptake of this payroll tax relief measure across the UK. The data is relevant for policymakers, tax advisers, and employers assessing the effectiveness and reach of the scheme in reducing employer-side payroll tax burdens.
Apply for a refund of National Insurance contributions
HMRC has published guidance on how individuals and businesses can apply for a refund of National Insurance contributions (NICs) that have been overpaid or paid in error. The guidance covers eligibility criteria, the types of NIC overpayments that qualify for a refund, and the process for making a claim. This is relevant for employees, self-employed individuals, and employers who may have made excess NIC payments. The refund process is an important aspect of UK payroll tax compliance, ensuring that taxpayers do not bear an undue NIC burden due to administrative errors or changed circumstances.
VAT Risks in UK Recruitment Under Joint and Several Liability Rules
UK businesses in the recruitment sector face significant VAT risks under joint and several liability rules, which can make agencies or hirers liable for unpaid VAT obligations of other parties in the supply chain. The rules are particularly relevant in labour supply chains where multiple intermediaries are involved. Compliance failures by one party can expose others to VAT debts they did not directly incur. The article highlights the importance of due diligence, contractual protections, and awareness of HMRC's enforcement approach in recruitment and staffing arrangements.
PAYE rules for labour supply chains that include umbrella companies from 6 April 2026
From 6 April 2026, new UK PAYE rules will apply to labour supply chains involving umbrella companies. Under the changes, the deemed employer rules shift PAYE and National Insurance Contributions obligations up the supply chain, making recruitment agencies or end clients responsible for payroll tax compliance where umbrella companies are used. This aims to tackle non-compliant umbrella arrangements that facilitate tax avoidance. The guidance outlines how to identify the deemed employer, calculate PAYE, and report correctly, significantly impacting staffing agencies, contractors, and businesses using temporary labour through umbrella structures.
The payroll superhero problem: What last-minute saves can reveal about risk and control gaps
This article explores the 'payroll superhero' phenomenon, where employees repeatedly save payroll processes at the last minute, masking deeper systemic risks and control gaps. While these interventions may seem heroic, they indicate underlying weaknesses in payroll operations, compliance processes, and internal controls. The piece argues that organizations should treat these recurring rescues as warning signs rather than successes, urging payroll leaders to identify root causes, strengthen process controls, and reduce dependency on individual heroics. Addressing these gaps improves compliance reliability, audit readiness, and overall payroll risk management, ultimately creating more resilient and controlled payroll functions.
A Simple Change Could Reshape Social Security’s Future, O’Malley Says
Former Social Security Administration Commissioner Martin O'Malley argues that a straightforward change to Social Security's funding mechanism could significantly improve the program's long-term financial outlook. The proposal likely involves adjusting the payroll tax cap on earnings subject to Social Security contributions, which would require higher-income earners to pay into the system on a greater share of their wages. Such a change would have direct payroll tax implications for both employees and employers, and represents a key policy debate around the sustainability of Social Security funding in the United States.
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