On 17 December 2025 the UK First‑Tier Tax Tribunal ruled that companies trading in telephone calling cards are liable for VAT and penalties, rejecting their claim to recover input VAT on purchases from a Hong Kong supplier. The tribunal held that the companies acted as principals, not agents, and failed to hold valid VAT invoices.
On 17 December 2025 the tribunal ruled that such companies are liable for VAT and penalties, as they acted as principals in the supply chain.
The tribunal rejected the claim, finding the companies did not hold valid VAT invoices and therefore could not recover input VAT.
The tribunal determined that the companies acted as principals, not agents, in the supply chain.
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UK Government · 5 days ago
HMRC’s guidance explains that intermediaries can register for the Import One‑Stop Shop (IOSS) scheme from 1 April 2026 and must submit a monthly IOSS VAT return on behalf of each client. The return must capture VAT on low‑value imports to EU and Northern Ireland consumers, use ECB exchange rates, and requires nil returns if no sales occur. Intermediaries must also keep 10‑year records and can correct returns within three years.
Law360 · 7 days ago
A London appeals court dismissed a UK telecommunications provider’s bid to recover £51.1 million in VAT payments, agreeing with a lower court that the VAT is owed when the provider supplied services. The decision confirms the provider cannot recover the VAT paid on its telecom services.
Bloomberg Tax · 7 days ago
The Upper Tribunal ruled that Lycamobile UK must pay more than £50 million in VAT, requiring the operator to charge VAT on the full price of prepaid mobile bundles at the point of sale, rather than only on services actually used. The decision, dated 12 Feb 2026, overturns Lycamobile's previous VAT calculation method.
UK Government · 8 days ago
This HMRC internal manual provides guidance on how VAT applies to local authorities and other government and public bodies in the UK. It covers various categories such as non‑business activities, police authorities, NHS capital projects, and local government partnership programmes. The manual serves as a reference for VAT compliance and exemptions for public sector entities.
Seeburger · 12 days ago
The UK will require all VAT invoices to be e‑invoiced by 2029, mandating machine‑readable formats and accredited transmission. The article outlines the scope, Peppol alignment, and a step‑by‑step timeline for 2026‑2028 to help finance, IT and procurement prepare. It highlights key milestones such as selecting an access point, adopting a canonical data model, and piloting with trading partners.
TaxJournal · 12 days ago
The interview with Fabian Barth, VAT Manager at Alvarez & Marsal, discusses the challenges of obtaining binding rulings in the UK, recent Supreme Court VAT cases in 2025, and his view that legislative changes should allow public law arguments in tribunals. He notes that the Hotel La Tour and Prudential cases downplayed CJEU precedent, and that European case law remains binding but is not always applied.
