HMRC has reversed its stance on UK VAT grouping, allowing overseas establishments of UK VAT groups to be treated as part of the group even in EU member states that do not allow whole entity VAT grouping. The change, announced on 19 January 2026, follows a November 2025 brief that also invites businesses to reclaim overpaid VAT. The shift aims to simplify cross‑border compliance and attract foreign investment, while expanding revenue‑protection rules.
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Crowe · about 15 hours ago
In the UK, the Upper Tribunal ruled that Invisalign clear aligners are not dental prostheses for VAT exemption purposes. The decision means that these supplies are standard-rated and businesses must review their VAT position. HMRC may now review the VAT treatment of aligners across the sector.
BBC · 5 days ago
UK: The government’s temporary VAT cut for attractions reduces the rate from 20% to 5% until 1 September, aiming to boost visitor numbers. The scheme, introduced on 25 June, allows businesses to pass the discount to customers, with Hoo Zoo offering two-for-one tickets.
UK GOV · 6 days ago
United Kingdom: HMRC announces changes to the VAT Capital Goods Scheme effective 29 July 2026. Computers and computer equipment are removed, the threshold for land, buildings and civil engineering works rises to £600,000, and other rules remain unchanged.
Mayer Brown · 6 days ago
United Kingdom: HMRC has updated its VAT Input Tax Manual and Notice 700/17, affecting how employers and trustees recover VAT on pension scheme services. The changes remove the 30/70 split rule and tripartite contract guidance, and clarify that employers must contract directly for services to recover VAT.
Tradeshift · 7 days ago
The United Kingdom’s Commercial Payments Bill will cap payment terms at 60 days and introduce 8% interest on late payments, while the e-invoicing mandate requires all VAT-registered businesses to exchange structured invoices over Peppol by 1 April 2029. Both measures aim to tackle the £11 billion annual cost of late payments, but the article argues that e-invoicing alone is insufficient without process improvements.
The Carer · 8 days ago
The UK will require all businesses, including care providers, to issue invoices electronically from the April 2029 tax year. The mandate aims to replace paper-based invoicing with machine-readable, structured data to improve accuracy and efficiency. Care homes stand to gain automation, better visibility and stronger compliance through this shift.
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Key Takeaways
From 19 January 2026, HMRC announced that overseas establishments of businesses VAT grouped in the UK should be treated as part of that VAT group even when located in an EU member state that does not operate whole entity VAT grouping.
In November 2025, HMRC’s Revenue and Customs Brief 7 invited businesses that had accounted for VAT under previous guidance to submit error correction notices to reclaim overpaid VAT.
Sections 43, 43A, and 43B of the Value Added Tax Act 1994 govern UK VAT grouping, allowing two or more eligible persons to be treated as a single taxable person for VAT purposes.
Primary source
Read the full article at Stewart's LawThis summary was published on VATfaqs.com on 20 January 2026. It relates to VAT developments in United Kingdom. The original source is Stewart's Law.
