HMRC released guidance on 28 January 2026 for developers of tax software that use generative AI. The guidance sets five mandatory principles—transparency, reliable source data, human oversight, security/GDPR compliance, and ethical AI with continuous auditing—to ensure AI outputs are trustworthy and legally grounded. Compliance requires clear disclosure, audit trails, limited data sources, and ongoing monitoring of models.
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Electrifying · about 17 hours ago
The UK Treasury has appealed a tax tribunal decision that ruled public electric vehicle charge points should be subject to 5% VAT. The tribunal had determined that public charge points fall within the domestic electricity supply VAT cut, but the government is contesting this. The appeal was lodged within the 56‑day deadline.
Law360 · 6 days ago
A UK court decision allows a travel agency to contest HM Revenue & Customs’ trimming of its VAT credit by approximately £187,000. The ruling spiked the tax authority’s bid for an early end to the case, giving the agency the right to pursue a full challenge. The case highlights the importance of monitoring HMRC adjustments and the potential for judicial review.
FE Week · 19 days ago
The Court of Appeal has ruled in favour of Colchester Institute in a VAT dispute with HMRC, allowing the college to reclaim VAT on pre‑2010 capital projects. The decision could extend to an estimated 20‑30 other colleges and raises uncertainty for charities that may lose VAT discounts. The ruling centres on the Lennartz mechanism, which HMRC had withdrawn in 2010.
Law360 · 26 days ago
A London court ruled that a technical college receiving free courses funded by the UK government must treat the funding as consideration for its taxable supply of services, making it subject to VAT that can be recovered from HMRC. The decision clarifies the tax treatment of government funding for educational services. The ruling was issued on March 27, 2026.
The VAT Team · 26 days ago
The article explains how place of supply rules determine VAT treatment for cross‑border services, outlining B2B and B2C rules, land‑related exceptions, and the importance of identifying place of supply to avoid compliance issues. It also highlights that UK VAT applies if the place of supply is the UK, and that non‑established businesses face a nil registration threshold.
GOV.UK · 28 days ago
The UK government’s Simplified Customs Declaration Process (SCDP) offers a two‑stage electronic declaration method that reduces border controls for authorised traders. Importers must be pre‑authorised, hold an EORI number, and submit a supplementary declaration within ten calendar days of the reporting period’s end, keeping records for four years.
The guidance lists transparency, reliable source data, human oversight, security/GDPR compliance, and ethical AI with continuous auditing as the five mandatory principles.
HMRC published the guidance on 28 January 2026.
Acceptable data sources are official HMRC publications, primary legislation, and established case law; generic web content is not acceptable.
Software must prompt users to review outputs, allow corrections, provide challenge mechanisms, flag complex scenarios, and recommend professional advice.
HMRC expects compliance with UK GDPR, privacy by design, a secure software development lifecycle (SSDLC), and clear visibility to users on how their data is processed.
This summary was published on VATfaqs.com on 3 February 2026. It relates to VAT developments in United Kingdom. The original source is VATCalc.
