The Supreme Court’s December 2025 ruling reaffirmed the BLP barrier, stating that VAT incurred on fees for share sales remains non‑deductible because of a direct and immediate link to an exempt supply. The decision effectively ends the argument that share‑sale proceeds can be used to recover VAT on overheads. Businesses must therefore plan VAT recovery strategies early and seek specialist advice before raising capital through share sales.
In December 2025 the Supreme Court held that the "direct and immediate link" test is the primary method for determining VAT deductibility, reaffirming the BLP barrier and confirming that VAT on share‑sale fees remains non‑recoverable.
No, the ruling confirms that VAT incurred on fees for disposing of subsidiaries through share sales remains an absolute cost and cannot be recovered.
It is the objective test used to determine VAT deductibility, requiring a direct and immediate link between the input services and the exempt supply; the Supreme Court emphasized that the economic purpose of the transaction is irrelevant.
Businesses must plan VAT recovery strategies early, seek specialist advice, and understand that VAT on share‑sale fees will not be recoverable under current law.
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GOV.UK · about 3 hours ago
This HMRC internal manual provides guidance on the VAT cost sharing exemption, detailing the conditions, interpretation, and procedural aspects for applying the exemption. It serves as a reference for HMRC staff and VAT professionals on how to apply the exemption in practice.
GOV.UK · 2 days ago
This guidance handbook provides technical instructions for traders and businesses on using the Simplified Customs Declaration Process (SCDP). It outlines procedures for simplified declarations, frontier declarations, transit movements, supplementary declarations, and other related customs processes, while emphasizing that users remain liable to meet all legal requirements.
BusinessGreen · 3 days 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 · 3 days 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 · 3 days 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 · 4 days 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.
