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.
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Cumbria Crack · about 15 hours ago
The UK government’s Great British Summer Savings initiative introduces a temporary VAT reduction from 20% to 5% on certain children’s meals and family-focused activities from 25 June to 1 September 2026. Businesses must identify qualifying supplies, review pricing, adjust bundled offers, and update booking and accounting systems to manage mixed VAT treatments and potential advance‑booking adjustments.
Bournemouth Echo · about 24 hours ago
HMRC has confirmed that VAT‑registered companies in Dorset can donate goods to registered charities without incurring VAT, provided the goods are used to support people in need or deliver charitable services. This removes a barrier that previously required businesses to pay VAT on donated goods. Businesses should keep accurate records of donated items, especially high‑value goods.
Marcus Ward · 5 days ago
HMRC has updated Notice 742A to clarify the treatment of opted land and buildings, including the requirement to account for output tax on assets remaining on hand at the point of VAT registration cancellation and the removal of a temporary change to the notification time limit. The notice also outlines whether optors need HMRC permission before exercising the option and how to notify HMRC of the decision.
Irish News · 7 days ago
The UK Government has announced a temporary VAT cut for Northern Ireland hospitality, reducing the rate on tickets for theme parks, zoos and museums from 20% to 5% for the summer holidays of 2026. The move is part of a broader push to align Northern Ireland’s rates with the Republic of Ireland, where food and hospitality services will fall to 9% later this year. The decision is seen as a proof point for differentiated VAT policy to support the sector.
Greater Birmingham Chambers of Commerce · 16 days ago
The UK Chancellor announced temporary VAT cuts from 20% to 5% on family attractions during school holidays, effective from the end of June to 1 September 2026. Additional measures include free bus journeys for under‑16s in England in August, a 12‑month HGV road tax holiday, and a one‑third reduction in red diesel duty until the end of 2026. Business leaders argue the cuts are insufficient to support hospitality and other sectors.
Museums Association · 16 days ago
The UK government has introduced a temporary 5% VAT rate on admission to certain family attractions, effective from 25 June to 1 September 2026, replacing the standard 20% rate. The cut covers museums, planetariums, heritage sites, nature reserves, botanical gardens, children’s meals and performance‑venue tickets marketed for children, but excludes seasonal passes beyond 1 September unless priced similarly to day tickets. Charities already exempt from VAT do not benefit unless they operate through a VAT‑registered trading subsidiary.
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Key Takeaways
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.
Primary source
Read the full article at Bloomberg TaxThis summary was published on VATfaqs.com on 16 January 2026. It relates to VAT developments in United Kingdom. The original source is Bloomberg Tax.
