HM Revenue & Customs has reversed its stance on UK VAT grouping, stating that EU case law restrictions no longer apply. The change allows overseas establishments of VAT‑grouped businesses to be treated as part of the group even in EU states that do not use whole‑entity VAT grouping, and invites firms to reclaim overpaid VAT. The policy, announced after the 2025 Budget, seeks to simplify cross‑border compliance and attract foreign investment.
HMRC reversed its position that EU case law restrictions applied to UK VAT grouping, allowing overseas establishments of VAT‑grouped businesses to be treated as part of the group even in EU states without whole‑entity VAT grouping.
The announcement followed the 2025 Budget and was published in Revenue and Customs Brief 7 (2025).
HMRC invited businesses that had accounted for VAT under the 2015 guidance to submit error correction notices to reclaim overpaid VAT.
HMRC expanded the definition in VAT Notice 700/2 to include enhanced risks to revenue collection and distortion in the liability of the group’s supplies.
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BusinessGreen · about 8 hours ago
A UK tax tribunal has ruled that VAT on public electric vehicle charging should be reduced to 5%, matching the rate already applied to home charging. The decision covers charging at service stations, supermarkets and residential streets, replacing the current 20% rate for public chargers.
VatCalc · about 8 hours ago
A UK First‑tier Tribunal has ruled that public EV charging can qualify for the 5% reduced VAT rate if the supply does not exceed 1,000 kWh per customer per month at a specific location, overturning HMRC’s earlier stance. The decision could lower charging costs and may influence the Treasury’s consideration to cut VAT on public charging to 5% ahead of the 2028 pay‑per‑mile levy. HMRC’s 2021 guidance still applies a 20% rate to public charge points, and the Treasury is reviewing VAT reforms to offset the levy’s impact.
BioEnergyTimes · about 13 hours ago
The UK First‑Tier Tribunal Tax Chamber ruled that public electric‑vehicle charging supplies qualify for the reduced 5% VAT rate, not the standard 20% rate, if the electricity supplied does not exceed 1,000 kWh per customer per month. The decision, delivered in late February 2026, could lower charging costs and requires HMRC to update guidance if the government does not appeal.
Independent School Management · 1 day ago
Since VAT was imposed on school fees, UK schools have struggled with partial exemption calculations, especially with fees in advance. The article explains that schools should apply the Standard Method Override when the difference exceeds £50,000, complete capital goods scheme adjustments six months after the year‑end, and that HMRC is now probing fees in advance and may inspect returns in person within 12‑18 months.
FleetWorld · 1 day ago
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 Independent · 3 days ago
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.
