Weekly VAT News

Tax Update Simplification, Administration and Reform Day: Indirect tax measures

On 28 April 2025, the government announced a package of tax policy proposals aimed at simplifying and modernising the tax and customs system, and tackling non-compliance. The package of measures included the publication of consultations and government responses to previous consultations, and a number of announcements on proposals for reform. The indirect tax measures included the following. Consultations have been published on: the introduction and design of VAT relief for business donations of goods to charities, reform of landfill tax, reform of the soft drinks industry levy, and the introduction of a new single remote gambling duty. Responses to these consultations are due on 21 July 2025. Responses to the following consultations were published: reform of the VAT Terminal Markets Order, the technical consultation on the introduction of a vaping products duty, the customs treatment of post and parcel exports, and the customs temporary admission procedure. The government announced simplifications to the VAT Capital Goods Scheme, to remove computers from assets covered by the scheme and increase the capital expenditure value of land, buildings and civil engineering work from £250,000 to £600,000, and the Spirit Drinks Verification Scheme. There were a number of proposals to simplify customs processes, including increasing customs digitalisation, improvements to the transit process, and changes to authorisation by declaration. There was also an announcement that the government is considering reform to marketplace liability for VAT. (Contact: Andrew Clarke)

Advance tax certainty for major projects – consultation

As part of its Corporate Tax Roadmap, at Spring Statement 2025 the government launched a consultation on advance tax certainty for major projects. The consultation seeks views on taxpayers’ priorities and sets out thinking on how a new process could work to support investment decisions. Whilst corporation tax will be the core tax on which clearances could be sought, the government is open to considering other taxes, including VAT, although the consultation states that it would not seek to duplicate existing processes such as partial exemption special method agreements for VAT and customs rulings. The consultation document explains how it expects the new process could work and asks for feedback. The consultation closes on 17 June 2025. (Contact: Andrew Clarke)

Public Accounts Committee report on the costs of administering UK taxes

The House of Commons Public Accounts Committee has published a report on The Cost of the Tax System. Following on from a National Audit Office report on the same topic from February, which highlighted increasing costs of administering UK taxes, the Committee urges HMRC to lay out realistic plans to simplify the UK tax system and establish robust metrics for annual reporting of the effects of tax simplification on HMRC’s and taxpayers’ administration and compliance costs. The Committee also expresses concerns regarding customer service and compliance productivity levels, and requests details of actions being taken to improve these. Much of the report focusses on digitalisation and technological improvements. The Committee requests that HMRC write to them following this summer’s spending review with a timetable for remediating remaining legacy HMRC IT systems. The Committee recommends more detailed consideration of taxpayer needs when designing new digital programmes and systems, with increased evidencing of this within business cases and public impact assessments. It has also requested an assessment from HMRC of how well-placed the tax authority is to take advantage of opportunities offered by new technologies such as artificial intelligence. (Contact: Donna Huggard)

CJEU VAT case calendar

On 8 May, the CJEU will deliver judgments in Dyrektor Krajowej Informacji Skarbowej on the VAT treatment of subsidies for operating public transport and L on low value consignment relief. There will also be an Advocate General opinion released in Zlakov on the VAT treatment of pro bono legal aid.

Dbriefs webcast

On Tuesday 6 May at 12.00, the UK Tax Update – May webcast will be hosted by Rachel Austin. Our panel will discuss the latest UK tax developments, with updates on news in corporate, employment and indirect tax.