Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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Say ‘I do’ to getting your side hustle tax right
HMRC is targeting individuals with side hustles to ensure they correctly report and pay tax on additional income. The campaign reminds UK taxpayers that income from activities such as selling goods online, freelancing, or renting property may be taxable and must be declared via Self Assessment. HMRC is using data-matching and digital platform reporting rules to identify undeclared income. The guidance outlines thresholds, registration obligations, and penalties for non-compliance, making it relevant for personal tax practitioners advising clients with secondary income streams beyond their primary employment.
Rethinking the RMD: The Giving Strategy Hidden Inside Your Client’s IRA
This article explores the tax planning strategy of Qualified Charitable Distributions (QCDs) from IRAs as an alternative to standard Required Minimum Distributions (RMDs). It highlights how clients aged 70½ or older can donate up to $105,000 annually directly from their IRA to a qualified charity, satisfying RMD requirements while excluding the distribution from taxable income. The strategy can reduce adjusted gross income, potentially lowering Medicare premiums and taxation of Social Security benefits. The piece offers practitioners actionable guidance for clients with charitable intent who face mandatory distributions, making it relevant for personal income tax planning.
Section 87A Rebate Litigation: Is the ITAT Appeal Fee Always ₹10,000? A Fresh Perspective
An analysis of whether the appeal fee before India's Income Tax Appellate Tribunal (ITAT) is always ₹10,000 in Section 87A rebate disputes. The article examines the fee structure under the Income Tax Act and argues that the applicable fee may vary depending on the assessed income or tax demand involved, offering a fresh perspective for practitioners handling rebate litigation. Section 87A provides a tax rebate for lower-income individuals, and disputes over its applicability have surged following recent tax authority positions. The piece has practical significance for taxpayers and advisors navigating ITAT proceedings on rebate claims.
Alstadsæter, Johannesen, Le Guern Herry & Zucman on Transparency and Offshore Wealth
Researchers Alstadsæter, Johannesen, Le Guern Herry, and Zucman examine the impact of financial transparency measures on offshore wealth concealment. The study analyzes how automatic exchange of information and beneficial ownership registries have affected the behavior of wealthy individuals hiding assets in offshore accounts. The research provides empirical evidence on whether transparency initiatives have meaningfully reduced offshore tax evasion, offering important insights for policymakers designing anti-avoidance frameworks and international tax cooperation mechanisms. The findings carry implications for global efforts to combat illicit financial flows and improve tax compliance among high-net-worth individuals.
John Healey should cut National Insurance, not raise the personal allowance
This article argues that reducing National Insurance contributions would be a more effective and economically beneficial policy choice than raising the personal allowance in the UK. The piece examines the comparative merits of both approaches, likely addressing impacts on workers, employers, and the broader tax system. It advocates for NI cuts as the preferred mechanism for putting money back into taxpayers' pockets, challenging conventional assumptions about income tax threshold increases as the default tax relief measure.
UK tax changes under Andy Burnham and John Healey: what businesses and individuals need to know
This article from Saffery examines UK tax changes introduced under Andy Burnham and John Healey, outlining implications for both businesses and individuals. It covers key policy developments affecting corporate and personal tax obligations, helping practitioners and taxpayers understand compliance requirements and planning considerations under the current UK government. The piece addresses how legislative shifts impact income, business structures, and broader financial planning, serving as a practical guide for those navigating the evolving UK tax landscape under the Labour administration's fiscal priorities.
Burnham Removes Tax On Electric Bills To Ease Living Costs
Andy Burnham, Mayor of Greater Manchester, has announced the removal of tax on electric bills as a measure to ease living costs for residents. The policy targets the tax component embedded in electricity pricing, aiming to reduce household energy expenses. This move represents a local-level fiscal intervention focused on consumer energy costs, with direct implications for personal finances and regional tax policy. The decision reflects growing political pressure on authorities to address energy affordability through tax relief mechanisms rather than subsidy-based approaches.
Allahabad HC Seeks Centre, CBDT’s Response on Judge’s Plea Against Tax Exemption Denial Under New Tax Regime
The Allahabad High Court has sought responses from the Central Government and the Central Board of Direct Taxes (CBDT) following a petition filed by a judge challenging the denial of tax exemptions under India's new tax regime. The case raises questions about whether certain exemptions available under the old personal income tax regime should apply or be accessible under the new simplified tax structure. The court's decision to issue notice to CBDT signals judicial scrutiny of the new regime's exemption framework, potentially impacting how personal income tax exemptions are interpreted and administered going forward.
Mike Lindell Had Wages Garnished, IRS Lien on Texas House in 2024
MyPillow CEO Mike Lindell faced significant IRS enforcement actions in 2024, including wage garnishment and a federal tax lien placed on his Texas property. These actions indicate substantial unpaid federal tax liabilities and represent active IRS collection efforts against a high-profile individual. The case highlights the IRS's use of enforcement tools such as liens and levies to recover delinquent taxes, serving as a notable example of personal income tax compliance and IRS collection procedures in practice.
IRS Introduces Automatic Penalty Relief for Eligible Taxpayers
The IRS has introduced an automatic penalty relief program for eligible taxpayers who failed to meet certain tax obligations, removing the need for taxpayers to proactively request abatement. The relief applies to qualifying individuals and businesses meeting specific criteria, offering a streamlined administrative process. This development is significant for tax practitioners managing compliance for clients with penalty exposure, as it reduces the administrative burden of formal penalty abatement requests. Practitioners should review client accounts to identify those automatically qualifying, ensuring they take full advantage of the relief without additional procedural steps.
Limited Partner Self-Employment Tax Exception Faces Critical Appellate Test
The limited partner self-employment tax exception under IRC Section 1402(a)(13) is facing a critical appellate court test that could significantly reshape how partnership income is taxed for self-employment purposes. The exception, which historically shielded limited partners from SE tax on distributive shares, has come under IRS scrutiny where partners perform services. Recent Tax Court decisions have narrowed the exception, and the appellate review could establish binding precedent affecting hedge funds, private equity, and other fund structures. Tax advisers should monitor the outcome closely, as it may require restructuring partnership arrangements to manage SE tax exposure.
Moving abroad for work: the UK tax questions everyone should ask
A Saffery podcast addressing key UK tax considerations for individuals relocating abroad for work. Topics likely cover UK tax residency rules, the statutory residence test, implications for income tax obligations, potential double taxation issues, and planning considerations for employees moving overseas. The content targets individuals and HR/mobility professionals navigating the complexity of cross-border employment, including questions around split-year treatment, domicile status, foreign income reporting, and employer payroll obligations for internationally mobile employees.
SC rejects FBR bid to impose 35pc tax on dividend income
Pakistan's Supreme Court has rejected the Federal Board of Revenue's attempt to impose a 35% tax on dividend income. The ruling represents a significant tax controversy outcome, blocking FBR's bid to apply the higher rate to dividends. The decision has direct implications for corporate and individual investors receiving dividend income in Pakistan, limiting the tax authority's ability to enforce the elevated rate. This ruling constrains FBR's revenue collection efforts and provides taxpayer relief, setting a judicial precedent on the permissible taxation of dividend income under Pakistani tax law.
Andy Burnham as Prime Minister – What Could It Mean for Tax?
This article speculates on the potential tax policy implications if Andy Burnham, current Mayor of Greater Manchester, were to become UK Prime Minister. It explores his known political positions and what changes he might pursue across areas such as wealth taxation, income tax, and business levies. The piece is a forward-looking analysis aimed at tax practitioners and businesses wanting to anticipate possible shifts in the UK tax landscape under alternative Labour leadership, drawing on Burnham's public statements and track record in regional government.
Draft legislation: Better use of new and improved third-party data
HMRC has published draft legislation aimed at improving the use of new and enhanced third-party data for tax compliance purposes. The proposals would expand HMRC's data-gathering powers, requiring third parties such as financial institutions, employers, and platforms to provide additional taxpayer information. This development has significant implications for personal and payroll tax administration, potentially enabling more accurate pre-population of tax returns and better detection of non-compliance. Practitioners should assess how clients' reporting obligations may change and prepare for increased data-sharing requirements under the updated framework.
One House Sold… Two Houses Bought! Will Section 54 Still Save Your Tax?
This article examines whether Indian taxpayers can claim capital gains tax exemption under Section 54 of the Income Tax Act when they sell one residential property and purchase two separate houses with the proceeds. Section 54 traditionally allows exemption on long-term capital gains from residential property sales if the proceeds are reinvested in one new residential house. The article analyses judicial interpretations and amendments that have evolved the provision, including the 2019 amendment permitting investment in two houses under certain conditions, exploring eligibility criteria, monetary limits, and practical planning considerations for taxpayers seeking to maximise their exemption.
Making Tax Digital for Income Tax: Frequently Asked Questions
This FAQ guide addresses Making Tax Digital for Income Tax (MTD for IT) in the UK, covering key questions practitioners and taxpayers have about the upcoming mandatory digital record-keeping and quarterly reporting requirements. MTD for IT will apply from April 2026 for sole traders and landlords with income over £50,000, expanding to lower thresholds in subsequent years. The article explains who is affected, what software is needed, how quarterly updates work, and the transition from Self Assessment. It serves as a practical compliance resource for taxpayers and advisers preparing for the regime change.
Have You Received a Letter from HMRC About Making Tax Digital for Income Tax?
HMRC has begun issuing letters to taxpayers who will be mandated to join Making Tax Digital for Income Tax (MTD for IT) from April 2026. This article explains what the letters mean, who is receiving them, and what action recipients should take. Targeted at sole traders and landlords earning over £50,000, the letters signal HMRC's formal notification process ahead of the mandate. The article advises taxpayers to assess their digital readiness, select compliant software, and engage with an accountant to ensure a smooth transition before the deadline.
How Withholding Taxes Affect Cross-Border Investment in Europe
An analysis of how withholding taxes on dividends and other investment income affect cross-border investment flows within Europe. The piece examines how varying withholding tax rates across European countries create barriers to cross-border capital allocation, potentially distorting investment decisions. It likely explores how treaty networks, EU directives such as the Parent-Subsidiary Directive, and domestic rates interact to shape the effective tax burden on cross-border returns. The analysis highlights the competitive and economic implications of withholding tax policy for European capital markets and investment attractiveness, offering insights relevant to policymakers and practitioners managing international investment structures.
Section 68 Cannot Be Invoked Mechanically: Gujarat High Court Says One-to-One Matching of Bank Credits with Sales Is Not Mandatory
The Gujarat High Court has ruled that Section 68 of the Income Tax Act, which deals with unexplained cash credits, cannot be invoked mechanically by tax authorities. The court held that a one-to-one matching of bank credits with individual sales transactions is not mandatory for taxpayers to explain the source of deposits. The ruling provides relief to businesses where bank credits represent aggregated sales proceeds, clarifying that tax officers must consider the overall nature of business operations and available records rather than demanding a rigid transaction-by-transaction correlation when assessing unexplained credits.
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