Weekly VAT News

VAT return due dates

The Chartered Institute of Taxation (CIOT) has reported that HMRC are seeing an increase in the number of VAT returns being submitted after the statutory due date, when the 7^th of the month falls on a weekend or bank holiday. HMRC attribute this to third party websites and AI search summaries stating that HMRC allow VAT returns with a due date falling on a weekend or bank holiday to be submitted on the next working day, which is incorrect. HMRC note that submission dates do not change when they fall on a weekend or bank holiday, and that if VAT returns cannot be submitted over a weekend or holiday period, the return should be submitted by the last working day before the due date. HMRC will be raising awareness of this issue in their next Agent Update. The CIOT also notes that payment must also be made by the due date or last working day prior. The CIOT has recommended that HMRC update their guidance to provide clarity for taxpayers and agents on this issue. (Contact: Andrew Clarke)

EU Deforestation Regulation

The EU Deforestation Regulation (EUDR) prohibits certain commodities, and products derived from those commodities, from being placed on or exported from the EU market unless certain deforestation-free requirements are met. Following simplification measures adopted in December 2025, including postponing the application of the EUDR to 30 December 2026, the European Commission has now announced a set of further measures, including the exclusion of leather and retreaded tyres from the scope of the EUDR. The Commission have published a report on the simplification of the EUDR and a draft delegated act amending the product scope of the EUDR. The EUDR guidance and frequently asked questions have also been updated. (Contact: James Simpson)

EU update

In other EU news, the European Commission has published a paper on the Fiscal Costs and Redistributive Effects of Reduced VAT Rates in the EU. The paper concludes that reduced VAT rates on essential goods (such as food and beverages, housing, water and electricity, and health-related products) are the most cost-effective in achieving redistribution. Reduced rates on other goods and services “offer limited redistributive returns at best” and are costly, although the paper acknowledges that reduced rates may be intended to achieve broader policy objectives. The paper concludes that reduced VAT rates can mitigate regressivity of consumption taxes, but their effectiveness depends upon their design and implementation, and that better targeting of reduced rates could enhance both equity and fiscal revenues. The European Commission also published the response to a consultation on the VAT rules for the travel and tourism sector, in particular the tour operators’ margin scheme (TOMS) and the VAT treatment of passenger transport services. Further information, including responses to the consultation, are available here. Following this consultation, the Commission will prepare a synopsis report, setting out its conclusions on the overall review of the VAT treatment of the travel and tourism sector, which will lead to an impact assessment presenting the analysis, findings, and options for review of the VAT rules. (Contact: Donna Huggard)

This week’s CJEU VAT case calendar

On 13 May, there will be a judgment in Stellantis Portugal on VAT and transfer pricing adjustments. There will also be an Advocate General opinion in Szytelbiecka on the meaning of ‘totality of assets’ in the context of the transfer of a going concern.