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Outlined in the VAT news galleries below are summaries of the latest VAT news items and Tribunal / Court cases in relation to VAT and there is a separate section for global news items, updates and court cases relating to VAT with relevant links provided.The world of VAT and GST is rapidly changing, driven by the increased focus on digitalisation, e-invoicing, and tax authority focus on the tax gap and harmonisation. The EU's VAT in The Digital Age package (VIDA) reforms will become mandatory from 1 July 2028 with e invoicing for B2B inter EU transactions becoming mandatory from 1 July 2030. The UK Chancellor announced as part of the 2025 Autumn budget that e invoicing will be mandatory in the UK for B2B and B2G VAT invoicing from 1 April 2029. E invoicing in particular has been mandatory for years in many South American nations such as Chile, Argentina, Brazil, Columbia and in some European countries such as Italy. European countries such as Germany, Romania, Poland have adopted mandatory e invoicing more recently. In Africa, Kenya, Nigeria, Egypt, Uganda and Tunisia have all adopted and implemented mandatory e invoicing.
Latest UK VAT News
VAT News - 26 July 2026 - UK Government Announces cut in VAT on Domestic Energy (5% to 0%) From 1 Oct 2026
The United Kingdom Government (new Prime Minister) announced on the 26 July 2026 that VAT on domestic energy will be cut from 5% to 0% from 1 October 2026.
The reduction is expected to apply to:
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Domestic Customers (households)
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Businesses that consume electricity within the de minimis level (33 kilowatt-hours (kWh) per day or 1,000 kWh per month)
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Residential Care Homes
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Charities - Non Business Electricity Use
Points to note are:
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The change will not apply to domestic gas consumption
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The change will likely widen the disparity between the VAT on domestic driveway electricity charging (5% to 0 %) and charging at public charging points where 20% VAT is applicable.
See below announcement link.
New PM cuts tax on household electricity bills to give ...
VAT News - June 2026 - HMRC Update on VAT Recovery for funded Occupational Pension Schemes
HMRC have updated their guidance on the recovery of input VAT incurred directly by the employer in relation to its funded occupational pension scheme as follows:
Input tax incurred by an employer on services provided in relation to its funded occupational pension scheme will be the employer’s input tax. This input tax is considered an overhead, as it is directly linked to the employer’s business as a whole. It is therefore recoverable in full, subject to any partial exemption restrictions. This treatment is the same whether the costs incurred relate to administration or management of the scheme’s investments.
If the employer contracts directly with a provider of fund management services, then it can deduct the input tax incurred, with the normal evidential requirements, such as an invoice in its name (an invoice ‘care of’ will be acceptable for this requirement, and alternative evidence may be considered in line with guidance at VIT31200).
Invoices correctly made out to a Trustee, and not the Employer may not be re-issued to the sponsoring employer, in line with normal VAT invoicing rules. Any input tax on them is the Trustees to be deducted in line with their Partial Exemption recovery position.
If the contract for management services is between the fund manager and the trustees, then for the employer to deduct, the trustees should make a taxable charge to the employer for their services of running the scheme on the employer’s behalf. The employer will then be able to deduct input tax on this charge.
As per normal VAT rules, issuing an invoice which is not paid does not give a right to recovery. A payment must be made; an agreement to make contributions does not provide proof of payment of VAT invoices.
There are two routes for an employer to evidence that they paid the costs of running a scheme:
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Invoices from the fund managers issued to the employer directly which they paid or deducted from the pension pot; either is acceptable as long as the employer holds an invoice and can evidence the payment; or
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The Trustees of the scheme incurred all of the costs (unable to recover because they did not incur costs for their taxable business activity) and raise a taxable charge for managing the scheme to the employer, so that they hold a valid invoice.
Source - HMRC Input VAT manual VIT44650 - Link - VIT44650 - Specific issues: Attribution of VAT on services ...
VAT News - May 2026 - Temporary Introduction of Reduce Rate VAT of 5%
The Government has announced the introduction of a temporary reduced rate of VAT (5%) for supplies of children’s meals and tickets to certain attractions, intended to reduce the cost of selected activities and services for families with children during the summer holiday period. The reduced rate will apply from 25 June 2026 to 1 September 2026 (inclusive).
The reduced rate for children’s meals and children’s tickets for cinemas, theatres, exhibitions and shows covers those supplies that are marketed, priced and presented as intended for children. These do not generally apply to supplies aimed at adult customers, except where those supplies form part of a qualifying family package as described in this brief. The reduced rate will apply to tickets for all customers for attractions set out within this brief.
This cut in VAT rate from the standard rate of 20% will be introduced by statutory instrument and have effect on admissions from 25 June 2026 to 1 September 2026 and will apply to the following supplies (where conditions are met):
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Children’s meals
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Children’s cinema, theatre, show and concert tickets
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Admission to certain attractions
