Weekly VAT News

Education Training Collective: Application of EU law – FTT

Education Training Collective (ETC), an education and training provider, was charged VAT at the standard rate on a supply of construction services. HMRC subsequently confirmed to ETC that the supply qualified for zero-rating. As the supplier of the services had entered administration and was unable to refund the VAT, ETC requested a refund directly from HMRC under the Reemtsma principle; a general principle of EU law under which a purchaser may be able to recover incorrectly paid VAT directly from the tax authorities where recovery from the supplier is impossible or excessively difficult. HMRC refused the claim on the basis that when the UK left the European Union, the right to bring a claim against HMRC based on a failure to comply with general EU law principles ended. The First-tier Tribunal has found that it did not have jurisdiction to determine the appeal. ETC argued that the UK VAT law could be interpreted, under the Marleasing principle of conforming interpretation, so as to allow Reemtsma claims. However, the FTT held that it was bound by the Upper Tribunal decision in Earlsferry Thistle Golf Club, which precluded the conforming interpretation contended by ETC. The FTT did not express a view on whether it would be possible post-Brexit for a purchaser to bring a Reemtsma claim against HMRC in civil proceedings. ETC’s appeal was struck out. (Contact: Andrew Clarke)

Trader Support Service – new service launched

The new version of the Trader Support Service (TSS) (an HMRC service supporting businesses that move goods between Great Britain and Northern Ireland) was launched on 20 October 2026. HMRC have issued guidance on the new TSS, including on declaring goods moving to or from NI using the TSS and registering to declare goods moving to or from NI using the TSS. HMRC have confirmed that businesses already registered with the previous version of the TSS will have been migrated to the new service and will not need to reregister. Declarations in progress under the previous TSS can continue to be managed through to completion. (Contact: Donna Hemphill)

VAT appeals – HMRC update

HMRC have updated their list of VAT appeals, which sets out the status of HMRC appeals that may have implications for other businesses. The update includes the information that HMRC have been granted permission to appeal the First-tier Tribunal decision in AAMRL Ltd and Maria Rosa Loria on VAT fraud, and are not seeking permission to appeal the First-tier Tribunal decision in Tapi Carpets Limited on VAT and floor fitting services. Amendments since the previous update confirm the already-public information that the taxpayers in the following Upper Tribunal decisions have been granted permission to appeal to the Court of Appeal: Align Technology Switzerland GMBH and Align Technology BV on VAT and aligners (due to be heard by the Court of Appeal by 17 August 2027) and Boehringer Ingelheim Limited on VAT and pharma payments (due to be heard by the Court of Appeal by 23 August 2027). And that HMRC have been granted permission to appeal to the Upper Tribunal in Charge My Street Limited on the application of the reduced VAT rate for public electric vehicle charging. (Contact: Donna Huggard)

Budget 2026

On 28 October 2026, the Chancellor of the Exchequer, John Healey, will present his Budget. This will be accompanied by the Office for Budget Responsibility’s outlook for the UK economy and public finances. For insights on the Budget announcements, visit our Budget 2026 page. Following this, on Thursday, 29 October 2026 at 12.00, there will be a Dbriefs webcast, during which our panel will discuss the OBR’s outlook for the UK economy, and the Budget’s key tax measures and their implications for business.