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.
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Anota · 2 days ago
The UK’s e-invoicing mandate will become mandatory for VAT-related B2B and B2G transactions from April 2029, requiring structured, machine-readable invoices. HMRC confirms existing VAT invoice requirements remain, but transmission and validation will change. Early preparation is advised to avoid data challenges and ensure compliance.
Energy Digital · 5 days ago
UK: New Prime Minister Andy Burnham will cut VAT on electricity bills from the start of October, exempting households in England, Scotland and Wales for six months. The measure will reduce average household bills by about £45 and cost the Treasury roughly £850m this financial year.
TaxResearch · 6 days ago
The UK will remove VAT from electricity bills from October, cutting average annual bills by about £45 per household. The move is expected to reduce tax revenue by roughly £1.1 billion, but critics argue it does not address underlying grid capacity issues.
Guardian · 6 days ago
The UK government will remove VAT from electricity bills for households in Great Britain from 1 October 2026, reducing the annual price cap by £45. Northern Ireland will retain the 5% VAT rate, and the cut does not apply to gas.
VatCalc · 6 days ago
The United Kingdom has announced that domestic electricity bills will be zero-rated from 1 October 2026, reducing the VAT rate from 5% to 0%. The measure is temporary, applying until 31 March 2027, and will be funded by cancelling the planned Digital ID programme.
The Independent · 6 days ago
The UK government will remove VAT from domestic electricity bills from 1 October 2026, cutting the rate from 5% to 0%. The change is expected to save households around £45 a year and will be funded by cancelling the Digital ID programme.
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Key Takeaways
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.
Primary source
Read the full article at VatCalcThis summary was published on VATfaqs.com on 23 January 2026. It relates to VAT developments in United Kingdom. The original source is VatCalc.
