HMRC has reset UK VAT grouping rules, allowing overseas establishments to be treated as part of a UK VAT group and removing EU case law such as Skandia and Danske Bank. The new policy reduces cross‑border VAT friction and invites businesses to correct over‑declared VAT, while expanding HMRC’s discretion to deny grouping where it sees collection risk or distortive outcomes.
HMRC’s Revenue and Customs Brief 7 (2025) now treats overseas establishments of UK VAT‑grouped entities as members of the UK VAT group, even if the overseas jurisdiction does not recognise whole‑entity VAT grouping.
The notice expands the definition of “protection of the revenue” to include collection risk and distortive outcomes, giving HMRC greater latitude to deny VAT grouping where it believes the result would undermine the VAT system.
HMRC invites businesses to revisit prior periods and correct over‑declared VAT, potentially unlocking significant recoveries.
Get VAT and indirect tax news delivered to your inbox twice a week.
No spam. Unsubscribe anytime.
GOV.UK · 6 days ago
This guidance outlines the Goods Vehicle Movement Service (GVMS) procedures at the border and during crossings. It details the check‑in process, the requirement for carriers to notify HMRC immediately at departure, and how to verify GMR status. The guidance ensures compliance with automated customs processes for goods vehicles.
Crowe · 7 days ago
On 9 March 2026 the First‑Tier Tribunal ruled that the reduced 5% VAT rate on electricity applies to public EV charging points, extending the domestic rate to these supplies. The decision is based on the 1,000 kWh per customer per month threshold and could allow charging providers to claim refunds for up to four years. The ruling is not yet legally binding until HMRC accepts it or the case is finalized.
LinkedIn Article by Laura Chipp · 8 days ago
The article explains how the VAT classification of a travel business as an agent or principal determines whether VAT is charged on the full travel supply or only on the intermediary commission. It outlines the key contractual and commercial factors that influence this classification and highlights the financial implications for finance teams, including VAT accounting, input VAT recovery, and the applicability of the Tour Operators Margin Scheme (TOMS).
Pinsent Masons · 11 days ago
A parliamentary question and Treasury response have clarified that paid entries in UK prize draws are not exempt from VAT and will be taxed at the standard 20% rate. The voluntary code of conduct for prize draw operators, aimed at improving consumer protection, will take full effect on 20 May 2026. The sector is valued at £1.3 billion annually.
ICAEW · 12 days ago
The Supreme Court’s December 2025 ruling reaffirmed the BLP barrier, stating that VAT incurred on fees for share sales remains non‑deductible because of a direct and immediate link to an exempt supply. The decision effectively ends the argument that share‑sale proceeds can be used to recover VAT on overheads. Businesses must therefore plan VAT recovery strategies early and seek specialist advice before raising capital through share sales.
GOV.UK · 12 days ago
This HMRC internal manual provides guidance on the VAT cost sharing exemption, detailing the conditions, interpretation, and procedural aspects for applying the exemption. It serves as a reference for HMRC staff and VAT professionals on how to apply the exemption in practice.
