Weekly VAT News

In this webcast, panellists will present EY’s analysis of the Autumn Budget, its implications for businesses and individuals, including:

• The economic outlook: What the latest Office for Budget Responsibility (OBR) forecasts mean for growth, inflation and the public finances
• Beyond the headlines: Key policy measures, consultations, sector-specific developments and changes to tax administration
• Looking ahead: The implications for taxpayers, investment and business planning in the UK and internationally

Date and Time
Thursday, 29 October, 14:00 – 15:00

Please register for this event here.

We are pleased to invite you to join EY’s webcast on Thursday, 29 October, where we will be discussing HMRC’s eagerly awaited e-invoicing roadmap, which is expected to be published during the Autumn Budget, on Wednesday, 28 October.

This will be a major milestone on the UK’s e-invoicing journey. The roadmap will provide businesses with greater clarity on the speed and pace required to meet mandatory e-invoicing rules in the UK from April 2029.

Initiatives such as e-invoicing will support HMRC’s Tax Administration 3.0 strategy, signalling a shift towards a more automated, data-driven approach to compliance, underpinned by AI, real-time information and greater data sharing.

As tax authorities increasingly rely on technology and data to identify risk and reduce the tax gap, organisations will need to focus on improving data quality, governance and automation to create an indirect tax function fit for the future.

Join our panellists, Liam Larke (Indirect Tax Transformation Partner), Simon Swanson (E-invoicing Senior Manager) and Sobia Ali (Indirect Tax Senior Manager, HMRC insights) as they discuss:

• HMRC’s e-invoicing roadmap and what it means in terms of readiness planning
• Lessons learned from jurisdictions that have already implemented e-invoicing, with examples from the TMT sector
• HMRC's digitalisation strategy from data to audit activity and AI
• Practical steps businesses can take now to improve data readiness and prepare for change

Whether you are in finance, tax, technology or transformation, this webcast will provide insight into the opportunities, challenges and actions needed to prepare for the next phase of digital tax administration.

Date and Time
Thursday, 29 October, 11:00 – 11:30

Please register for this event here.

For further information, please contact Sarah Delaney.

If your tax authority analysed all of your transaction data tomorrow, how confident would you be in answering their questions?

The relationship between businesses and tax authorities is changing rapidly. Driven by e-invoicing, real-time reporting, advanced analytics and increasing digital transparency, tax authorities are gaining greater visibility into organisational data.

As we move further into the era of Tax Administration 3.0, the focus is no longer simply on compliance. Organisations may increasingly need to demonstrate that their data is accurate, explain how tax decisions are made and provide confidence in the controls that underpin them.

Join EY's Indirect Tax team for an engaging webcast exploring what Tax Administration 3.0 means in practice and how organisations can position themselves for success in an increasingly data-driven tax environment.

In this event we will explore:

• How tax authorities are leveraging technology, data and automation
• What emerging compliance and reporting requirements mean for businesses
• What leading organisations are doing today
• Assessing your organisation's readiness

Whether you are at the start of your transformation journey or seeking to benchmark your current approach against leading practice, this webcast aims to help you understand where you are today, where the market is heading and what steps you should take next.

Date and Time
Monday, 2 November, 09:00–10:00

Please register for this event here.

Moving to S/4HANA is a chance to rebuild how tax works. However, too often, tax is overlooked as part of the system design process and tax teams are brought in too late, after key design decisions have been made. As a result, tax determination gaps appear and legacy logic gets carried across, leading to missed opportunities, integration gaps and longer timelines.

Please join us for a roundtable discussion over dinner at Lucky Cat by Gordon Ramsay, Mayfair, where we will consider:

• Is tax designed into the S/4HANA programme, or are you reacting to decisions already made?
• Where does SAP’s native capability end, and where does a specialist tax engine begin?
• Can your business case stand up in front of the CFO?

Your hosts will provide three perspectives from the organisations shaping tax transformation in S/4HANA environments: SAP, Thomson Reuters and EY.

This event will be of interest to heads of tax, indirect tax leaders, tax technology leaders and tax transformation leaders.

Date and Time
Thursday, 19 November, 17:00 – 21:00

Spaces are limited for this event. If you are interested in registering or require further details, please contact Ruby Buckland.

The Chancellor has announced plans to introduce a range of measures to reduce administrative and tariff costs for British businesses, giving them “some breathing space for today and hope for the future”. The Government says the measures will save businesses almost £800 million. This includes extending import tariff suspensions on more than 250 products, saving up to £155 million per year. The changes support the Government’s plan to cut the administrative burden of regulation on businesses by 25% by the end of Parliament.

Administrative reforms

The changes announced by the Chancellor include:

• Streamlining company reporting requirements, saving firms up to £290 million per year
• Reducing duplicative reporting burdens for asset managers, saving £105 million a year
• Streamlining the home-buying and selling process, saving businesses in the transaction chain £116 million a year

For small businesses, the Government said it will:

• Make it simpler for small firms to bid for public contracts by standardising requirements in sectors such as construction
• Streamline ONS business surveys to reduce the number of data requests businesses have to fill out
• Make it easier for businesses to find support and guidance on GOV.UK, and give small businesses a way to report disproportionate regulations
• Implement the Government’s “Tell Us Once” ambition, including by pausing the Companies House profit and loss filing requirement for April 2028

The full detail of individual administrative saving measures which qualify toward the 25% target will be published on GOV.UK on 28 October.

Tariff suspensions

On tariffs, the Government announcement says:

“Extending suspensions on import tariffs follows a public consultation. This will ensure tariff free imports on over 250 goods that were due to expire on 31 December are extended until December 2028. All suspensions that were consulted on are being extended, apart from those that no longer have a material effect. The extensions will maintain reduced import costs for businesses of up to £155 million a year across many sectors, including the chemicals, plastics, hydrogen, automotive, and food and drinks industries.

Those import tariff suspensions due to expire in June 2027 will also be extended by 6 months to December 2027, providing continuity for businesses while a formal review of a possible further extension takes place.

A new window will open from 11 November to 3 February, giving businesses the opportunity to submit views on whether these existing tariff suspensions should be extended beyond 2027 and suggest further new suspensions to bring down costs for businesses.”

For further information please contact Chris Sanger (Policy) or Shenshen Lin (Trade and tariffs).

Topics – Visual art – supply of services or supply of goods

T-903/25 Grotta Nuova

This Opinion is not available in English

On 21 October, the General Court of the European Union (GCEU) delivered the Opinion of Advocate General Martín y Pérez de Nanclares (AG) in this Danish referral concerning the VAT treatment of ‘visual art’. The first question asks whether Articles 2(1)(a) and (c) and 371, together with Annex X, Part B, point 2, of the VAT Directive, must be interpreted as meaning that an artist’s single complex supply, such as that in the immediate proceedings, is a supply of goods within Article 14(1) or a supply of services within Article 24(1), read together with Article 371 and Annex X, Part B, point 2.

Grotta Nuova (GN) is a sole proprietorship and is registered as a ‘visual artistic creator’. It is owned by Thomas Poulsen, an artist who trained at the Royal Danish Academy of Fine Arts, School of Visual Art.

In 2014, the Higher Preparatory Secondary School, Copenhagen (The Efterslægten), sent an application to the New Carlsberg Foundation for funding for a work of art. The New Carlsberg Foundation is a private and independent art fund, with the task of promoting art in Denmark.

The Efterslægten had carried out the construction of a sports hall with open air areas, including a garden. It requested the funding from the New Carlsberg Foundation for a work of art which could link the architecture of the buildings at the Efterslægten with its teaching activities.

The funding request was agreed and GN created a ‘Sculpture and inner courtyard’, an approximately 700-square-metre installation comprising concrete and gravel areas, pavilions, sculptures (incorporating motorcycles and parts), a water feature, trees and renovation of a bay window. The work was completed and unveiled in March 2016, with Efterslægten becoming its owner while being required to preserve the artist’s artistic intentions.

A dispute arose when the Danish tax authority decided, in July 2016, that GN had supplied a VAT-exempt artistic service. As a consequence, GN was denied deduction of input VAT on the goods and services purchased to produce the work. GN appealed and during the proceedings, the Danish Academic Council gave its professional opinion that the installation should be regarded as a ‘sculpture’, specifically an example of a ’social sculpture’. Nevertheless, the Danish Tax Appeals Agency upheld the tax authority’s decision.

This case concerns two main VAT classification issues. First, whether the artwork supplied by GN should be treated as a supply of goods or a supply of services. Second, if it constitutes goods, whether it qualifies as a ‘work of art’, specifically an original sculpture, for the purposes of Articles 81, 103 and 311 and Annex IX, Part A, point 3 of the VAT Directive. The classification materially affects GN’s VAT position. If the work is both goods and a sculpture, the legislation applying to an artist’s first sale of their own artwork would permit GN to calculate output VAT on a reduced basis, producing an effective VAT rate of 5%, while retaining full entitlement to deduct related input VAT. If the work is goods but does not qualify as a sculpture, GN would still be entitled to full input VAT deduction but could not apply the reduced VAT treatment. Conversely, if the transaction constitutes a VAT-exempt supply of artistic services, GN would not be required to account for output VAT on the supply but would also be unable to deduct the input VAT incurred on costs associated with creating the work.

GN argued that its transaction should be classified as a supply of goods under Articles 2(1)(a) and 14 of the VAT Directive, rather than an exempt supply of services under Articles 2(1)(c) and 24. It contends that Denmark’s exemption for artistic services derives from the transitional derogation in Article 371 and Annex X, Part B, point 2, which must be interpreted strictly and should not extend to the supply of physical works of art. GN further submitted that the design, concept work, sketches and creation of the artwork formed a single indivisible transaction. The essential feature, viewed from the customer’s perspective, was the completed physical artwork, while the associated artistic services were merely ancillary to its production. Accordingly, the entire transaction should be treated as a supply of goods, entitling it to deduct input VAT. Finally, it argued that the artwork qualified as a ‘sculpture’ under Article 311 and Annex IX, Part A, point 3 of the VAT Directive, allowing the reduced VAT treatment provided for by Article 103(2) as applicable at the relevant time. In its view, ‘sculpture’ encompasses three-dimensional works and does not require the artwork to be movable.

The tax authority disagreed, arguing that GN made a VAT-exempt supply of artistic services, meaning it had no right to deduct related input VAT. Considering the transaction as a whole, the tax authority considered that its predominant features were the development of artistic ideas, preparation of sketches and creation of a bespoke installation specifically designed for the school, making the artistic services qualitatively more important than the physical elements supplied. Alternatively, if the transaction constitutes a supply of goods, it does not qualify as a ‘work of art’ or ‘sculpture’ under Article 311(1)(2) and Annex IX, Part A, point 3. In its view, a sculpture must be capable of being moved and imported as an object. As the installation is integral to the school and cannot be moved in its entirety, the normal VAT rules, including Article 73, rather than the reduced-rate provisions of Article 103, should apply.

The AG began by examining the referring court’s assumption that the various elements of the transaction constituted a single supply for VAT purposes. The AG recalled that under established CJEU case law, transactions that are normally distinct should nevertheless be treated as a single supply where either the elements are so closely linked that their separation would be artificial, or one element constitutes the principal supply while the others are ancillary because they are not ends in themselves for the average consumer. On the limited facts available, the AG considered the second approach more appropriate.

The AG considered that the principal supply was the completed work of art, while activities such as its design, installation and potentially the landscaping surrounding it could be ancillary. However, other elements, particularly renovation of the school’s bay window, could constitute separate supplies. Ultimately, it remained for the referring court to determine whether, and to what extent, the individual elements actually formed such a single supply.

Turning to classification, the AG concluded that the single supply should be treated as a supply of goods rather than a supply of services. From the perspective of the average consumer, the predominant feature was the acquisition of the tangible completed artwork. The artistic design and creative process did not alter that conclusion, and any genuinely ancillary supplies would follow the VAT treatment of the principal supply.

Considering whether the supply could qualify as a supply of a ‘work of art’, the AG opined that the sculptures were capable of satisfying the definition, however, the AG expressed doubt over whether concrete pavilions forming part of the works could themselves be classified as works of art rather than architectural, craft or commercial works. The AG suggested that the applicable reduced-rate provisions had to be interpreted strictly.

The AG concluded that a single supply whose principal element is the physical supply of a work of art, accompanied by one or more ancillary supplies, constitutes a supply of goods. For the transaction as a whole to constitute the supply of a ‘work of art’, all elements forming the principal supply must satisfy the relevant definition. Accordingly, if the sculptures alone constitute the principal supply and the pavilions are ancillary, the transaction may qualify as the supply of a work of art. However, if the sculptures and pavilions are inseparable elements of equivalent importance, the whole transaction can qualify only if the pavilions themselves also meet the definition. Craft and commercial works competing with comparable industrially produced goods are excluded.

Comments: Businesses commissioning or supplying bespoke artworks and installations should carefully assess what the customer is principally acquiring when determining the VAT treatment. Where the predominant element is a completed tangible artwork, associated design, creative and installation services may be ancillary, resulting in a supply of goods rather than services. Businesses should also consider whether individual elements constitute separate supplies and, where a reduced VAT rate for works of art is claimed, whether all significant elements of the principal supply satisfy the VAT Directive’s definition of a ‘work of art’. Clear contracts, pricing and documentation evidencing the nature and purpose of each element will therefore be important in supporting the VAT treatment adopted. The most tax-efficient means of contracting may depend on the ability of the recipient to recover VAT. As such, this is something to consider when determining what specific obligations will be undertaken by the artist or other supplier.

Topics – Import VAT – maintenance and repair work

T-383/25 Segelbootwartung

The General Court of the European Union (GCEU) has released its decision in this German referral which asks whether a means of transport enters the economic network of the European Union if it is not used as a means of transport in a Member State, but a service (maintenance and repair works) is performed on it. Is Article 124(1)(k) of the Union Customs Code (UCC) to be interpreted as meaning that a non-Union good is used, within the meaning of that provision, if, within the customs territory of the Union, only maintenance or repair works are carried out on it, and the non-Union good is then re-exported.

The applicant and respondent is a Swiss resident who brought a sailing boat that was registered to him in Switzerland on a trailer into Germany. He failed to arrange a customs clearance at the border, but during a customs control check he declared that he had brought the boat into Germany for the purpose of having scheduled servicing and maintenance works carried out on it.

The Customs Office imposed customs duty and import VAT on the boat by means of an import duty assessment notice. The work was subsequently completed on the boat, and it was re-exported to Switzerland. During its time in Germany, the boat was not used for any other purposes within the European Union.

The applicant lodged an objection, contesting the import duty assessment notice. The applicant maintained that the work carried out on the boat was merely maintenance and that providing services to the boat did not bring it into the EU economic network.

The Finance Court noted that the customs debt had been incurred because the applicant, upon crossing the border, made neither an ‘express notification’ of presentation of goods to customs nor a customs declaration in respect of the boat. The conditions for temporary admission were not satisfied because the boat had not actually been used for sea or inland waterway transport; merely being capable of transport was insufficient. However, the court considered that the customs debt, and any import VAT liability, had been extinguished under Article 124(1)(k) UCC following re-exportation.

The customs authority appealed, arguing that the unauthorised processing of the boat constituted ‘use’, preventing the removal of the customs debt. It also argued that the work carried out brought the boat into the EU’s economic network, giving rise to import VAT.

The GCEU firstly considered whether a boat imported into the EU without being presented to customs or declared had ‘entered’ the EU’s economic network, such that import VAT became chargeable, because repair or maintenance services were carried out on it before it was re-exported.

In this regard the GCEU distinguished the customs infringement from the conditions governing import VAT; the mere incurrence of a customs debt does not automatically mean that import VAT is also due. The GCEU recalled a charge to import VAT requires the goods to have entered the EU’s economic network which presupposes, at the very least, that the goods were intended for consumption or use within the EU. For a means of transport such as a boat, the relevant concept is principally use. In the immediate proceedings, the performance of maintenance and repair services on the boat while it was present in the EU was not sufficient. The GCEU distinguished between actual use of the boat and work merely intended to make it fit for such use. Repairs and maintenance did not amount to actual use of the boat according to its specific function, namely navigation. The fact that the repair services themselves might be subject to VAT was separate from whether import VAT arose on the boat.

The GCEU also noted that unlawful introduction creates a presumption of entry into the EU economic network, but that presumption can be rebutted by objective and verifiable evidence showing that the goods were not intended for consumption or use in the EU.

In summary, on this point, the GCEU held that the unauthorised introduction of a means of transport from a third country does not give rise to import VAT where objective and verifiable evidence establishes that it was not intended for use within the EU and it was re-exported without actually being used there.

The GCEU went on to consider whether the maintenance and repair work carried out on the boat before it was re-exported amounted to ‘use’ of the goods pursuant to Article 124(1)(k) of the UCC, which would prevent the customs debt from being extinguished.

Referring to the case law of the CJEU and the UCC, the GCEU recalled that ‘use’ does not cover every use of goods but only use which would itself justify the imposition of customs duties. The fact that the work on the boat had not been formally authorised under an inward processing procedure was not, by itself, sufficient to prevent the debt from being extinguished. Otherwise, Article 124(1)(k), which is intended to mitigate the consequences of certain customs infringements where there is no deception, would be deprived of much of its effectiveness.

The GCEU concluded that maintenance and repair work does not constitute ‘use’ under Article 124(1)(k) where that work could have been authorised under inward processing procedures. In this regard it is for the national court to determine whether the work and the applicant satisfied the relevant conditions for such authorisation, including the requirements for possible retroactive authorisation.

Comments: The GCEU has departed significantly from the earlier opinion of Advocate General Brkan. The AG had considered that bringing the boat into the EU without placing it under a special customs procedure meant that it entered the EU economic network and import VAT was therefore due. She also considered that carrying out repairs without inward-processing authorisation constituted ‘use’ under Article 124(1)(k) UCC, so the customs debt could not be extinguished.

By contrast, the GCEU has held that unlawful introduction creates only a rebuttable presumption of entry into the EU economic network. No import VAT arises where objective evidence shows that the boat was not intended for EU use and was re-exported without actual use there. It also held that repairs do not constitute ‘use’ for Article 124(1)(k) where they could have been authorised under inward processing, and the conditions for relief are otherwise satisfied, notwithstanding the absence of formal authorisation. This may be an important judgment for those seeking to minimise import VAT on goods that are repaired, or transited through, a territory without being formally used there. This may be particularly the case where the items are brought into the territory by a person other than the owner given that this can make it challenging to recover any import VAT that is incurred.

For further information please contact Mitchell Moss or Gerard Koevoets.

Wednesday 4 November

Judgment– T-680/25 Mercedes Benz

Topics – Free-of-charge provision of moulds – supply of services

A Romanian referral which asks whether the VAT Directive, in particular Article 26, must be interpreted in a specific context such as that in the immediate proceedings, as meaning that the making available free of charge of pieces of equipment/moulds by their owner to a particular supplier, which in turn makes them available to one or more sub-suppliers (producers), which produce parts/components, for the benefit of the owner of the moulds, which they sell to the supplier, which in turn resells them to the owner of the moulds, may be regarded as a supply of services for consideration.

Thursday 12 November

Hearing – T-859/25 Kabakum 3808

Topics – Contribution of individual assets to a newly established company – transfer of a totality of assets?

A Bulgarian referral which asks, inter alia, whether Article 19 of the VAT Directive can be interpreted as meaning that the contribution of individual assets – three offices – to the capital of a newly established company, constitutes a transfer of a totality of assets within the meaning of that provision, regardless of the fact that there is no permit for the use of the building in which the assets are located and those assets, at the date of the contribution, cannot be used for carrying out taxable supplies by either the person providing the contribution or the recipient thereof.

Wednesday 18 November

Hearing – T-53/26 Central Europe Mark

Topics – Tax neutrality and proportionality in providing security for VAT

A Czech referral which asks whether the principle of proportionality or the principle of tax neutrality preclude national legislation on measures providing security for VAT, which, provided that the conditions set by the law are met, allows the tax administrator to secure from the taxpayer an amount (or to enforce it by execution) on the basis of a justified concern that the tax that will likely be assessed will be irrecoverable, without the taxpayer subsequently being granted interest on the difference between the amount secured and the assessed tax, if the constitution of the security itself is not found to be unlawful.

Topics – Lack of invoices to evidence input tax – whether HMRC refusal to exercise discretion to accept alternative evidence was flawed

Unatrade Limited

The First-tier Tribunal (FTT) has released its decision in this case concerning a decision by HMRC to deny 90% of the input tax claims made by Unatrade for the 07/23 to 11/23 VAT periods. The denial was on the basis that Unatrade did not hold valid VAT invoices and that HMRC would not exercise full discretion under Regulation 29(2) VAT Regulations 1995.

Unatrade purchases luxury goods (predominantly Rolex watches) from UK high street retailers and exports them to a company in Hong Kong for onward sale in the Chinese market. Its supplies are treated as zero-rated due to the exports it makes and it claims full repayment of the input tax incurred. As a result of being in a repayment position, monthly VAT returns are submitted.

HMRC requested supporting documentation for all transactions made in the 07/23 period. Unatrade provided till receipts, bank statements and sales/export documentation. HMRC then requested the purchase invoices for two more specific transactions. With those two further transactions, the documents provided at the time of the decision covered more than 99% of the input VAT claimed in the relevant VAT period.

HMRC advised, in a pre-decision email, that the documents provided did not satisfy the requirements of Regulation 14; either no purchaser details were shown, or the details shown were not those of Unatrade; and/or no VAT rate was shown; and/or no VAT amount was shown. HMRC asked Unatrade to provide any other evidence that it wanted to have taken into account before the decision was finalised. Unatrade provided three purchase documents showing an amount of VAT (albeit different purchaser details); two of these were dated 4 November 2022 and one was dated 21 June 2022. They were not for any of the periods mentioned in the pre-decision letter.

HMRC concluded that Unatrade did not hold sufficient evidence to support deductions of input tax. However, given that Unatrade had managed to produce some documents showing an amount of VAT, they proposed that they would allow a deduction of 10% of the input tax claimed.

Unatrade argued that it was entitled to recover the full input VAT because the purchases were genuine and the VAT could be calculated from the till receipts. It maintained that HMRC had unreasonably treated the absence of valid VAT invoices as determinative, contrary to VAT neutrality and Regulation 29(2) which provides discretion to accept alternative evidence. Unatrade also argued that HMRC had misapplied its policy and the concept of “systematic” failure, and that it had unreasonably extrapolated its findings from the 07/23 period to the 08/23 to 11/23 periods.

HMRC argued that Regulation 29(2) provides an ‘exception’, not an alternative to the general requirement to hold a valid VAT invoice. Unatrade’s receipts did not contain sufficient evidence that VAT had actually been charged, and merely calculating VAT from the gross purchase price was insufficient. Although some documents showed VAT, these related to different suppliers or periods. HMRC also stressed that Unatrade had not attempted to obtain valid invoices for the transactions concerned. Given that Unatrade confirmed its business model remained broadly unchanged, HMRC considered it reasonable to extrapolate earlier findings to later VAT periods.

Dismissing the appeal, the FTT held that Unatrade had substantially failed to provide evidence that VAT was actually charged on its purchases. Although the goods were standard-rated and the VAT could mathematically be calculated from the gross price, this merely assumed that VAT had been charged and did not constitute evidence of it.

Referring to the Court of Appeal judgment in Tower Bridge GP, the FTT considered that Regulation 29(2) allows HMRC to accept alternative evidence that remedies deficiencies in an invoice, rather than permitting input tax recovery without evidence of the VAT charged. Unatrade’s argument that it was unable to force suppliers to provide valid invoices also failed because it had not actually requested them.

The FTT also considered that HMRC was entitled to extrapolate its findings from earlier periods because Unatrade confirmed its business model remained broadly the same. Importantly, the FTT did not determine whether HMRC’s original exercise of discretion was flawed. Instead, it concluded that, even if it had been flawed, any proper exercise of the discretion would inevitably have produced the same result because of the absence of evidence that VAT had actually been charged. The FTT also found that HMRC’s decision to allow 10% of the input tax claimed could not be regarded as unreasonable.

Comments: This decision follows that of Plat UK Ltd and reinforces the importance of holding compliant VAT invoices at the time a claim is made. It demonstrates that HMRC’s discretion under Regulation 29(2) will not ordinarily be exercised where the evidence leaves doubt as to who actually received the supplies and whether VAT was charged.

For further information please contact Andy Jones.

HMRC’s list of VAT appeals updates includes the following:

• Align Technology Switzerland GMBH & Align Technology BV – Whether aligners are dental prostheses and exempt from VAT. The Upper Tribunal allowed HMRC’s appeal. Align Technology Switzerland GMBH & Align Technology BV have been granted permission to appeal to the Court of Appeal.
• Boehringer Ingelheim Ltd – The Upper Tribunal allowed HMRC’s appeal holding payments made in relation to NHS voluntary price control schemes do not reduce the consideration or VAT due. Boehringer has been granted permission to appeal to the Court of Appeal.
• Bolt Services UK Ltd – The Court of Appeal allowed HMRC’s appeal holding that VAT is due on the whole fare for on-demand passenger transport not on the margin using the Tour Operators’ Margin Scheme (TOMS). Bolt Services UK Ltd has been refused permission to appeal to the Supreme Court.
• Charge My Street Ltd – HMRC have been granted permission to appeal to the Upper Tribunal. This is an appeal considering the VAT liability of off-street electric vehicle charging supplied to consumers in public premises. The First-tier Tribunal held this is subject to the reduced rate of VAT (HMRC contends it is subject to 20%). See Revenue and Customs Brief 4 (2026).
• Clearwater Hampers Ltd – Following a taxpayer win before the First-tier Tribunal where it was held that a lidded basket was ancillary packaging in relation to the food and drink in the hamper, HMRC is not seeking permission to appeal.
• Colchester Institute Corporation (CIC) – This case concerns the VAT treatment of public monies received by further education institutions to fund the provision of free education to eligible students. HMRC historically took the view that monies received by these institutions from government funding agencies was a grant and therefore the activity it funded was outside the scope of the VAT system. The Court of Appeal dismissed HMRC’s appeal. CIC successfully argued that the monies represented third party consideration paid by the funding agencies for the supply of education to students. HMRC is not seeking permission to appeal. See Revenue and Customs Brief 3 (2026).
• Ingliston Driving Experiences Ltd – This appeal considers whether driving experiences qualified for the temporary reduced rate of VAT. The First-tier Tribunal allowed the appeal and HMRC’s appeal to the Upper Tribunal was heard 27 July 2026.
• Innovative Bites Ltd – The First-tier Tribunal decision found in favour of the taxpayer that oversized marshmallows are not normally eaten with the fingers and are therefore zero rated. HMRC is not seeking permission to appeal.
• Queenscourt Ltd – The Upper Tribunal held that KFC dip pots supplied as part of a takeaway meal deal are separate zero-rated supplies. HMRC is seeking permission to appeal to the Court of Appeal.
• St Patrick’s International College Ltd & Ors – The Court of Appeal allowed St Patrick’s International College & Ors’ appeal. This case considered whether certain supplies of higher education made by St Patrick’s International College (SPIC), London College of Contemporary Arts (LCCA) and Interactive Manchester (IMAN) should have been exempt from VAT under Article 132(1)(i) of the VAT Directive or Group 6 of Schedule 9 to the VATA94. The Appellants argued that the UK had failed to properly implement Article 132(1)(i), entitling them to rely directly on the Directive. Alternatively, they contended that their supplies qualified for exemption under specific provisions of Group 6. HMRC have been granted permission to appeal to the Supreme Court.
• Tapi Carpets Ltd – This case considers whether Tapi Carpets (TC) acted as a principal when arranging a carpet-fitting service for its customers. The First-tier Tribunal allowed TC’s appeal and held that, when arranging carpet fitting services, it acted as a disclosed agent rather than as principal. HMRC is not seeking permission to appeal.

These Guidelines for Compliance (GfC21) are for UK and overseas businesses involved in cryptoasset transactions where UK VAT may apply. This includes businesses that sell or exchange cryptoassets and businesses that operate platforms where other people do this.

They explain what you need to consider when deciding how VAT may apply to your cryptoasset activities, including if you need to register for VAT and what VAT obligations you may have. This includes activities involving cryptocurrencies or other tokens supplied to customers or to other businesses.

Sections 'Determining whether your customer is a business or a private customer' and 'Determining if your supply is a digital service' have been updated to clarify where the place of supply is for B2B sales, subject to the 'Use and Enjoyment' rules.

For further information please contact Alex Hale.

This Guidance explains how to account for VAT and who to contact if you're an insolvency practitioner and you're appointed over insolvent VAT-registered businesses. Information in sections '9 – Trading after bankruptcy', '14 – Taking control of goods or distraint', '22 – Funded pension schemes' and '26 – The Mid-sized Business temporary Customer Compliance Manager model' has been removed and replaced with links to this information within the 'Insolvency practitioner's handbook'.