The newsletter covers recent VAT developments, including a new EU customs duty for low-value parcels, a UK Supreme Court ruling affecting VAT recovery on fundraising activities, and a change in VAT treatment for locum doctors following HMRC's decision not to appeal a tribunal ruling.
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TaxPolicy · about 13 hours ago
A proposed permanent reduction of the UK hospitality VAT rate from 20% to 10% would cost an estimated £12‑14 bn per year, with the bulk of the benefit accruing to large chains such as McDonald’s. The analysis argues the cut is mis‑targeted, unlikely to lower prices, and would create incentives for businesses to re‑characterise activities to qualify for the lower rate. It suggests alternative measures—such as business‑rate reform or NIC relief—would better support the sector.
Business Wales · 2 days ago
The UK Government will temporarily reduce VAT on children’s meals and outings to 5% from 25 June 2026 to 1 September 2026, cutting the standard rate of 20%. The scheme covers children’s menu meals in restaurants, tickets for theatres, cinemas, soft play, adventure centres and theme parks. Businesses should review the GOV.UK guidance for eligibility and compliance.
VatIT · 4 days ago
The article provides a detailed checklist for UK VAT‑registered businesses to comply with the Making Tax Digital (MTD) programme, outlining digital record‑keeping, API submission, exemption criteria, and the penalty regime. It also highlights upcoming MTD requirements for Income Tax and offers guidance on software selection and consolidation.
Law360 · 4 days ago
A London tribunal ruled that Barclays' British branch was skeletal and did not constitute a fixed establishment for VAT grouping purposes, resulting in the loss of Barclays' appeal. The decision clarifies the application of UK fixed establishment rules for foreign entities.
1stopVAT · 4 days ago
HMRC has introduced a mandatory online registration portal for tax advisers who interact with HMRC on behalf of clients. The portal becomes operational from 18 May 2026 and must be fully functional by 31 March 2027. Advisers have three months from the opening of the registration window to apply for an Agent Services Account (ASA).
HM Revenue & Customs · 4 days ago
HM Revenue & Customs has introduced a temporary reduced VAT rate of 5% for qualifying children's meals, tickets and family attractions. The rate applies from 25 June 2026 until 1 September 2026. After that, the standard rate will resume.
From July, all parcels entering the EU with a value of €150 or less will be subject to a flat customs duty of €3 per item.
The decision means businesses that have previously reclaimed VAT on such costs in the last four years will need to review those transactions, potentially resulting in significant VAT repayments to HMRC.
Primary source
Read full article on LinkedIn by MHAThis summary was published on VATfaqs.com on 16 January 2026. It relates to VAT developments in United Kingdom. The original source is LinkedIn Article by MHA.
