Indirect tax news from the past week
2 November 2026
On 28 October 2026, the Chancellor of the Exchequer, John Healey, presented Budget 2026. WVN this week covers the highlights from an indirect tax perspective.
Electronic-invoicing
As foreshadowed, the government published an e-invoicing implementation Roadmap, setting out the government’s approach to implementing e-invoicing for VAT invoices from 1 April 2029. The government will continue developing the detailed design of the regime and consult on technical standards, with the key requirements organisations need to prepare for implementation being published from October 2027 to April 2028. A tax information and impact note was published. A consultation was also published on e-invoicing digital reporting, which closes on 20 January 2027.
VAT zero rate for donated medicines
As previously announced, zero rating will apply to medicines provided free of charge by pharmaceutical companies for the treatment of patients in qualifying circumstances, such as through early access schemes and during or after clinical trials. The zero rate applies to qualifying donations made on or after 23 June 2026. There is a tax information and impact note. HMRC also issued Revenue and Customs Brief 12 (2026): VAT zero rate on donated medicines and a new VAT public notice: Zero rating medicines supplied free of charge (VAT Notice 1004).
VAT on public EV charging
From 1 November 2026, electricity supplied at publicly accessible and workplace electric vehicle charging points will be deemed not to be for domestic use for VAT and climate change levy (CCL) purposes. Accordingly, the standard VAT rate of 20% (and not the reduced rate) will apply, as will CCL. In addition to the tax information and impact note, including the legislation, HMRC have issued Revenue and Customs Brief 13 (2026): VAT and Climate Change Levy on electric vehicle charging for non-domestic use.
Reverse charge services received from abroad
From 1 April 2027, the reverse charge on cross-border supplies of services will be restricted to VAT-registered businesses. Overseas suppliers of services to non-VAT registered UK businesses will be required to account for UK VAT. The government has said that this follows the 2020 call for evidence on VAT and the sharing economy. The government published a tax information and impact note.
VAT treatment of land for social housing
From 1 April 2027, a zero rate will be introduced for the supply of land sold to registered providers of social housing (relevant Housing Associations). The government published a response to the previous consultation.
Energy-saving materials and electricity
The government has confirmed that the VAT rate applicable to energy-saving materials will revert to the reduced rate, from the temporary zero rating, from 1 April 2027, from which date heat batteries will be included within the scope of energy-saving materials. The temporary zero rating applicable to domestic electricity will be extended to 30 June 2027.
Removal of VAT exemption for a deputy for a medical practitioner
From 1 May 2027, VAT exemption will no longer apply to the supply of a deputy for a registered medical practitioner. According to the tax information and impact note, the measure is intended to remove exemption for a supply of staff, with services consisting of medical care, including deputising services, remaining VAT exempt. (See Revenue and Customs Brief 9 (2025) and Revenue and Customs Brief 6 (2026), following the Isle of Wight decision, for context.)
Extension of online marketplace liability
The online marketplace liability rules will be extended to UK businesses. From 1 October 2027, online marketplaces will be responsible for collecting VAT on sales by UK VAT registered businesses and other UK business with a minimum annual sales threshold per platform of £90,000. The government published, a response to the previous consultation, a factsheet, and a tax information and impact note.
Private hire vehicle operators
From 2 January 2028, private hire vehicle operators with an annual fare turnover above a specified threshold will be subject to VAT on the full value of their fares. The government will consult on the level of this threshold, with £50 million annual fare turnover as the lead option. The government published a tax information and impact note.
Tour Operators’ Margin Scheme
The government has published a call for evidence on the VAT treatment of travel services in relation to the Tour Operators’ Margin Scheme, seeking views on how TOMS is currently working and options to change, improve, and simplify the application of VAT to travel services more generally. The call for evidence closes on 31 January 2027.
Other announcements included the following, with the rates set out in Annex A of the overview of tax legislation and rates (OOTLAR).
Aggregates levy will increase from 1 April 2027 in line with the Retail Prices Index (RPI). Air passenger duty (APD) rates will increase from 1 April 2028 in line with RPI. Alcohol duty rates will increase from 1 February 2027 in line with RPI. On the carbon border adjustment mechanism, there will be a consultation on expanding CBAM to include refinery products. The main rate of the climate change levy on electricity will be frozen from 1 April 2028, at the 2027-28 level. For excise duty, a targeted civil penalty will be introduced for deliberate conduct intended to evade duty before an excise duty point arises. The temporary 5 pence per litre fuel duty reduction will be extended to 30 June 2027, and the planned RPI increase deferred to 1 July 2027. Landfill tax (LFT) rates will increase from 1 April 2027, for the standard rate by RPI, and for the lower rate by the cash amount of the standard rate increase. The rate of machine games duty will increase from 20% to 25% for machine games with stakes over £1 or prizes over £100 from 1 April 2027. A consultation was also issued on changes to liability for machine games duty. Legislation will be introduced to amend how the remote gaming duty rules interact with freeplays, prizes, and tournaments; a tax information and impact note was issued. The plastic packaging tax (PPT) rate will increase from 1 April 2027 in line with the Consumer Prices Index (CPI), and, following consultation, from 1 April 2030 mandatory certification will be introduced for mechanically recycled plastic used in plastic packaging. With a view to protecting vaping products duty revenues, a consultation was issued on a nicotine approval scheme, which closes on 20 January 2027. From 1 April 2027, rates of soft drinks industry levy (SDIL) will increase, and previously announced changes to SDIL will come into effect on 1 January 2028.
Details of the indirect tax measures from Budget 2026 can be found on TaxScape. A recording of our Budget Dbriefs webcast is available to watch on demand. Further details of the Budget measures will be included in the Finance Bill, which will be published in due course. (Contact: Andrew Clarke)