A UK tribunal ruled that community public charging supplies qualify for the 5% reduced VAT rate under the de minimis provision, overturning HMRC's earlier 20% requirement. The ruling applies to supplies below 1,000 kWh per month per customer at each location and is limited to operators meeting the community‑based model. The decision could influence VAT treatment for other public charging operators.

The Court of Appeal dismissed an appeal challenging the 20% VAT on private school fees, upholding the Treasury’s position that the measure is lawful and necessary. The policy, which took effect on 1 January 2025, was defended as essential to avoid serious detrimental consequences for low‑cost private schools. The High Court had previously dismissed the challenge in June 2025.

Crowe UK outlines five key VAT and tax risks and opportunities for hospice charities, covering corporation tax on non‑primary purpose trading, Gift Aid compliance, fundraising event exemptions, building project VAT relief, and upcoming investment rules effective April 2026. The article highlights practical compliance steps and recent court rulings that may affect hospice operations.

The UK guidance explains the special procedure for outward processing, which allows goods to be temporarily exported from the UK for repair or processing. It outlines the rules, application process, authorisation, and duty calculation for such movements, covering both the UK and EU/Northern Ireland contexts.

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.

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.

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.

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.

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.

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.

The Finance (No. 2) Bill 2024‑26 has been amended in Committee and will return to the House of Commons for further stages. Scotland will introduce a new Air Departure Tax on 1 April 2027, replacing APD, with a consultation closing 26 March 2026. Deloitte’s Advance Tax Certainty service will become operational from July 2026, while the OECD Global Forum on VAT met in January 2026 to discuss digital economy and near real‑time data collection.

The HMRC internal manual outlines the rules and procedures for calculating and managing default interest on VAT arrears. It covers legal powers, calculation methods, interest adjustments, and circumstances affecting default interest, providing guidance for HMRC staff and taxpayers.

The UK First‑Tier Tax Tribunal issued a judgment on 26 January 2026 clarifying the eligibility of input VAT deductions in cases involving fraud. The tribunal upheld HMRC’s denial of deductions for payments to four payroll service providers, finding that the taxpayers knew the transactions were connected to VAT fraud. The decision reinforces that knowledge of fraud can lead to denial of input VAT recovery.

The UK First Tier Tribunal ruled that payments under VPAG, PPRS and similar schemes are post‑supply price reductions, meaning the VAT originally paid was too high. The Upper Tribunal hearing is set for 9–11 February 2026, with a decision expected shortly after, potentially unlocking up to £2.5 billion in VAT reclaims for pharma and healthcare businesses. Companies can adjust VAT back up to four years by filing protective claims now.

KPMG’s weekly update highlights two contrasting VAT rulings on hair loss treatments and a key import‑VAT recovery case. The UK Tax Tribunal zero‑rated the Kinsey system for female hair loss as a service of adapting goods for a disabled person, while a surgical hair transplant was standard‑rated as cosmetic. The Yourway Transport decision clarified that a taxpayer can recover import VAT on drugs moved to other Member States when acting as an agent and deemed owner under s47.

Reform UK has proposed cutting the VAT rate on hospitality from 20% to 10% as part of a rescue package for pubs and restaurants. The article argues that the move would undermine VAT neutrality, add administrative complexity, and likely fail to lower consumer prices. It also notes that Germany announced a similar 7% hospitality VAT cut in January 2026.

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.

A UK Upper Tribunal decision allows a bespoke hair‑replacement system for severe female hair loss to be zero‑rated under Schedule 8 of the VAT Act 1994. The ruling expands the definition of disability to include social and psychological impacts and confirms that composite supplies that adapt goods can qualify for relief. The case clarifies that wigs and similar products are not automatically treated the same, opening new zero‑rating opportunities for adaptive products.

The UK Supreme Court’s 2025 decision in HMRC v Hotel La Tour Ltd clarified that input VAT on professional fees linked to a share sale is irrecoverable because the costs are directly tied to an exempt supply. The ruling confirms that the direct and immediate link test applies to share sales and that being part of a VAT group does not allow recovery of such fees. The judgment underscores the need for careful documentation to distinguish between exempt and out‑of‑scope transactions.

The UK First‑Tier Tax Tribunal issued a judgment on Jan. 9 clarifying input VAT deduction and zero‑rating rules for second‑hand car transactions. The case involved a company that purchased high‑value used cars in Northern Ireland and sold them to customers in the Republic of Ireland. The Tribunal found that the taxpayer could not claim the input VAT deduction and zero‑rating as the Tax Agency had denied the claims.