Weekly VAT News

GfC 21: Help with VAT treatment of cryptoassets

HMRC have issued a Guidelines for Compliance (GfC), Help with VAT treatment of cryptoassets – GfC21, setting out HMRC’s view of how VAT applies to cryptoasset transactions, including where sold via exchanges. The GfC emphasises that there are no separate VAT rules for cryptoassets and that the VAT treatment will depend upon the features of the underlying asset (for example, for non-fungible tokens (NFTs), the NFT itself merely represents ownership, and is not a separate asset itself). The GfC goes on to set out the rules for UK VAT registration and record-keeping, including customer information requirements to determine place of supply. The GfC notes that the VAT rules regarding digital services and electronically supplied services (ESS) may apply, which may affect the place of supply. Where cryptoassets are supplied through an online platform, the GfC states that it is necessary to identify whether the supply is made by the supplier or by the platform operator, and accordingly who is liable to account for VAT. The GfC provides examples to illustrate where the supplier must account for the VAT and where the responsibility lies with the platform operator. Finally, the GfC states that if a business’ only role in the supply is to provide payment services, the business is not regarded as a digital platform, and does not have to account for the VAT on the sale of the digital service or ESS. (Contact: Dave Taylor)

CBAM – calculation of liabilities

The UK Carbon Border Adjustment Mechanism (CBAM), which will place a carbon price on specified goods imported into the UK, will come into effect on 1 January 2027. The government has announced the publication of information regarding the calculation of CBAM liabilities. Illustrative CBAM rates and worked example for CBAM sets out illustrative sector-level CBAM rates that would apply from 1 January 2027. The information is intended to help businesses understand how future rates will be set, and to provide businesses with an initial indication of potential CBAM costs. The official CBAM rates for Q1 2027 will be published before the end of the year, and then on a quarterly basis. Check the default values for the CBAM sets out the default emissions values, expressed in tonnes of carbon dioxide equivalents (tCO2e) per good. The values can be used where the importer is not able to determine actual emissions. A trade-weighted average default value has been published per 8 digit commodity code, and data from the EU is excluded to recognise the commitment to linking the UK and EU Emissions Trading Schemes. A 10% mark-up has been applied to all sectors except fertilisers. The default values will apply for 2027 and 2028, with the government committing to introduce country-specific default values from 2029. (Contact: Zoe Hawes)

EU customs duty and handling fee – guidance

Following the announcement of the EU-wide €2 handling fee for goods sold in distance sales and released for free circulation in the EU, which is expected to apply from 1 November 2026, the European Commission has issued guidance on the handling fee, which also includes guidance on the temporary €3 customs duty, which has applied since 1 July 2026. (Contact: Sam Kiely)

UK tax policy: the consultation pipeline – Deloitte article

Our latest Deloitte Insights article, UK tax policy: the consultation pipeline, reviews the principal consultations and calls for evidence published over the summer, adding to an already extensive consultation programme, and considers what the consultation pipeline may indicate about the future direction of UK tax policy.

VAT case update and calendar

The Supreme Court has refused the taxpayer’s application for permission to appeal against the Court of Appeal’s judgment in Bolt Services UK Limited that the tour operator’s margin scheme did not apply to private hire vehicle ride-hailing services. The application was refused on the basis that it “does not raise an arguable point of law of general public importance which the Supreme Court ought to hear at this time.”

At the Court of Justice of the European Union, an Advocate General opinion is due on 21 October 2026 in Grotta Nuova, a reference from Denmark on whether the supply of an art installation is a supply of goods or of services for VAT purposes.