Indirect tax news from the past week
17/02/2025
Electronic invoicing – consultation
On 13 February 2025, HMRC and the Department for Business and Trade (DBT) opened a consultation on Electronic invoicing: promoting e-invoicing across UK businesses and the public sector. The government considers that increased uptake of e-invoicing may improve productivity, improve cashflow, simplify tax reporting, and reduce the tax gap. Accordingly, the government is looking to explore the options for different models of e-invoicing and government involvement to encourage uptake. At present there are no required standards for e-invoicing (except for suppliers to NHS England). The consultation notes that for e-invoicing to be beneficial, all systems would need to be able to interact with each other, based on common standards. The consultation asks for views on how standards could be used to support e-invoicing adoption and potential benefits, but at this stage the government is not looking to identify specific standards for adoption. The consultation also asks for feedback on whether e-invoicing should be voluntary or mandatory. The consultation makes it clear that the government is not seeking to implement a centralised e-invoicing model which would require suppliers to submit and validate invoices to a centralised platform before they are issued to the customer. It does, however, note the possibility of implementing a centralised data share model which would require suppliers to issue invoices to a central platform, thereby allowing HMRC the ability to read and extract transaction details, as well as allowing customers to receive and process e-invoices. In addition to the consultation, the government will hold business round tables and other events to enable stakeholders to contribute to future policy development. If there is a decision to proceed with the introduction of a standard for e-invoicing, there is a commitment to work with businesses and representative organisations, including the software and accounting sectors. The consultation is open until 7 May 2025. (Contact: Giuseppe Ciampa)
Anglia Ruskin Students’ Union: whether café was a bar – HC
Anglia Ruskin Students’ Union ran a bar or café called 92 at Anglia Ruskin University. The High Court has refused the Union’s application for judicial review of HMRC’s decision that 92 was a ‘bar’ and therefore did not qualify for an extra-statutory concession that would mean that 92’s supplies would be exempt from VAT. Supplies of catering are subject to VAT, as they are excepted from zero-rating. However, supplies of catering to students by eligible bodies, including universities, are exempt from VAT, on the basis that the supplies are ‘closely related’ to exempt supplies of education. Under an extra-statutory concession (section 5.5 of VAT Notice 709/1), HMRC extend the exemption granted to supplies of catering by universities to student unions, but the concession does not cover food and drink sold by, inter alia, bars. The Union argued that ‘bar’ means a place that does not supply catering, or, alternatively, predominantly or mainly serves alcohol. However, the Court accepted HMRC’s argument that a bar is “somewhere where one can buy and drink alcoholic and other drinks, as well as food”, and that 92 met that definition. The Court also rejected the Union’s second ground of appeal, which was that HMRC’s policy is irrational, based on difference of treatment. 92 was treated the same way as other cafés and bars in the vicinity of the university, and it was rational that 92 did not benefit from the ‘educational context’, as 92’s supplies were not ‘closely related’ to the supply of education by an eligible body. The Court considered both permission to appeal and the substantive case together, and found in favour of HMRC. (Contact: Laurie Pay)
Deloitte’s Attitudes to Trade Survey 2025
UK businesses are increasingly optimistic about future trade with Europe, but are worried about a potential higher tariff trading environment this year, according to the Deloitte UK Attitudes to Trade Survey 2025. This survey of 750 senior business leaders from UK firms trading internationally gauges sentiment towards UK trade policy and identifies key challenges facing UK businesses. According to the findings, UK businesses are adapting to the post-Brexit trade environment, with fewer experiencing losses in trade and a majority (64%) optimistic about the benefits of the government’s EU policy. While 90% of business leaders support some level of alignment with EU rules, there is no consensus on the ideal balance between regulatory autonomy and closer trade ties, highlighting the complexities of navigating this new landscape. Business leaders are anticipating more barriers to trade in 2025 compared to last year, including higher tariffs and taxes across the globe. Most businesses intend to mitigate the impact of a potentially higher-tariff environment, with 45% looking to increase prices and 47% planning to explore alternative export markets. Nearly half (45%) of respondents intend to put a mitigation strategy in place but have not yet done so. Businesses are positive about the UK’s trade policy, but consider that more can be done to help businesses utilise the benefits of free trade agreements, in particular with improved market access and improved communication of the benefits of free trade agreements. (Contact: Henry Morris)
Deloitte Intrastat Guide 2025
The 2025 edition of the Deloitte Intrastat Guide has been published, which sets out Intrastat filing requirements and procedures for the EU member states and the United Kingdom (for Northern Ireland). Intrastat is a statistical declaration that records intra-EU movements of goods above a certain threshold, including Northern Ireland. There are some differences in how the member states apply the Intrastat rules, and affected traders accordingly need to understand the rules for each member state. (Contact: Donna Huggard)
Dbriefs webcast
On Wednesday 19 February at 12.00, there will be a webcast on Future changes which impact the use of umbrella companies. Our panel will discuss what umbrella companies are and the current compliance landscape, details and the potential impact of changes coming up in April 2026, and best practice next steps for businesses with umbrella companies in their supply chain.