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.
The VATfaqs digest
Global VAT news, delivered Tuesday and Thursday. Free, curated from 50+ official sources, no spam.
No spam · Unsubscribe any time
Energy Digital · about 8 hours 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 · 1 day 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 · 1 day 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 · 1 day 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 · 2 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.
The Independent · 2 days ago
In the UK, the government announced an £850 million tax cut on energy bills, making electricity bills VAT free from 1 October 2026 in England, Scotland and Wales. Northern Ireland remains exempt because EU VAT rates apply under the Windsor Framework, preventing the cut from applying there.
Reach finance leaders who read VAT news.
Put your brand alongside trusted tax-tech intelligence across 150+ countries.
Key Takeaways
The hearing is scheduled for 9–11 February 2026, with a decision expected shortly after.
It decided that these payments are post‑supply price reductions, so the VAT originally paid was too high and should be adjusted.
Up to £2.5 billion of VAT could be reclaimed.
Businesses can adjust VAT back up to four years.
They should submit protective claims to HMRC now to be ‘stood behind’ the tribunal outcome.
Primary source
Read the full article at Cooper ParryThis summary was published on VATfaqs.com on 5 February 2026. It relates to VAT developments in United Kingdom. The original source is Cooper Parry.
