Weekly VAT News

Tax Update 2026: Simplification, modernisation and fairness – Indirect tax measures

On 23 June 2026, the government announced a package of tax and customs measures “to simplify and modernise the tax and customs system”, in particular to “simplify rules, improve taxpayer guidance, and ensure more taxpayers can benefit from high-quality digital services”. The package of measures included the publication of consultations and announcements on proposals for reform. The indirect tax measures included consultations published on: extending online marketplace liability and the VAT treatment of land intended for social housing (responses due by 18 August 2026); customs modernisation (due 15 September 2026); and the introduction of mandatory registration for customs intermediaries (due 21 September 2026). Also announced were: plans to digitise the option to tax process; the potential use of ‘supplementary’ data for VAT returns; acceleration by six months of the removal of customs duty relief for low value imports; the use of Peppol as the core interoperability network for electronic-invoicing; and a number of measures to simplify and modernise the customs system. The Department for Environment, Food & Rural Affairs also released a policy paper on the UK’s approach to deforestation regulations. (Contact: Andrew Clarke)

VAT and medicines: Compassionate use and early access programmes

Exchequer Secretary Dan Tomlinson MP has stated, during House of Commons oral questions to HM Treasury on 23 June 2026, that the government will be bringing forward a new approach to address the VAT treatment of medicines supplied through compassionate use and early access programmes. Prior to this announcement, HMRC considered the provision of the medicines represented a deemed supply and that VAT was due, and a number of HMRC enquiries were ongoing or had been concluded, with assessments issued. This new approach appears to be in response to representations made to government by various parties in the pharmaceutical sector and their representatives (including Deloitte) on the importance of these programmes. The new approach is expected to involve either changes to the VAT rules or a reimbursement scheme. The Exchequer Secretary stated that the change will be effective for the provision of medicines made on or after 23 June 2026. Further detail is awaited. (Contact: Chris Cherrill)

Deloitte European VAT Refund Guide 2026

The 2026 edition of the Deloitte European VAT Refund Guide is now available. Businesses operating in countries in which they are not VAT-registered can incur significant amounts of VAT on expenses paid in those countries. The VAT Refund Guide covers the rules and procedures on how to claim a VAT refund in 32 European countries.