An Iranian MP chants anti-Britain slogans yesterday. The parliament approved a draft bill to slash diplomatic and economic relations with the UK after it increased sanctions on Tehran.
An Iranian MP chants anti-Britain slogans yesterday. The parliament approved a draft bill to slash diplomatic and economic relations with the UK after it increased sanctions on Tehran.
An Iranian MP chants anti-Britain slogans yesterday. The parliament approved a draft bill to slash diplomatic and economic relations with the UK after it increased sanctions on Tehran.
An Iranian MP chants anti-Britain slogans yesterday. The parliament approved a draft bill to slash diplomatic and economic relations with the UK after it increased sanctions on Tehran.

'Only the beginning' as UK ambassador expelled by Iran over sanctions


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Amid chants of "death to England", Iran's parliament voted by a large majority yesterday to expel the British ambassador just weeks after Dominick Chilcott took up his post.

A stage-managed protest against "evil" London's sanctions over Iran's nuclear programme is due today outside Britain's fortresslike embassy in central Tehran, the scene of sometimes violent anti-western demonstrations.

One parliamentarian warned that Iranians could storm the compound as they did the US embassy in 1979.

London infuriated Iranian politicians this month by sanctioning Iran's central bank, which Britain accused of helping to fund Iran's nuclear programme.

Tehran warned that other countries "behaving in a similar manner" would also be punished.

"This is only the beginning," Ali Larijani, the powerful parliamentary speaker, vowed.

The EU will consider this week a French call to go for Iran's economic jugular by banning Iranian oil exports. Britain called the move to expel Mr Chilcott "regrettable" and "unwarranted".

It would do "nothing to help the regime address their growing isolation or international concerns about their nuclear programme and human rights record," said a spokesman for the UK Foreign and Commonwealth Office.

"If the Iranian government acts on this we will respond robustly in consultation with our international partners," he added

The bill, which gives Mr Chilcott two weeks to pack his bags, must be approved by Iran's hardline Guardians Council.

This is likely to be a formality, according to analysts.

Tehran intends to scale down economic relations with Britain, which are already in decline, to a "minimum".

The bill was approved by 171 of the 196 parliamentarians present.

London and Tehran will still maintain diplomatic relations, although at the reduced level of charge d'affaires.

Several MPs wanted ties severed completely.

"We must place a lock on the British embassy and ignore them until they come begging like the Americans," said Mahmoud Ahmadi Bighash, an MP.

The US severed ties with Iran in 1980 after its embassy was seized by militant students who held 52 diplomats hostage for 444 days.

"The British government should know that if they insist on their evil stances, the Iranian people will punch them in the mouth, exactly as happened against America's den of spies," Mehdi Kuchakzadeh, an MP, said.

The effect of Mr Chilcott's expulsion will be mainly symbolic.

Until his arrival last month, Britain was represented at charge d'affaires level for several months by Jane Marriott, who is regarded as highly competent.

She will once more head the diplomatic mission if Mr Chilcott is forced to leave. Britain may find it hard to retaliate in kind against Iran, which has long chosen to be represented only at charge d'affaires level in London and so has no ambassador to expel.

Britain sanctioned Iran's central bank after a report by the UN's nuclear watchdog earlier this month strongly suggested that the Islamic republic had conducted research into nuclear weapons.

Tehran insists its nuclear programme is designed solely to generate electricity.

The US, which has spearheaded the drive for punitive measures against Iran, stopped short of sanctioning the country's central bank over fears about the potential effects on the oil market and the global economy.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer