Summaries of interesting VAT cases for the SME owner.
In Its Plant-Tech Limited v HMRC [2026] TC10013, the First Tier Tribunal (FTT) found that a genuine belief that employees had been transferred to third-party entities was no substitute for evidence. Without proof of that transfer, input tax on invoices for wages and employers' National Insurance Contributions was not deductible.
In Minerva Research Labs Limited v HMRC [2026] TC10017, the First Tier Tribunal (FTT) found that anti-ageing liquid collagen products for human consumption were not 'food' for VAT purposes and should not be accounted for as a zero-rated product.
In Chandra Bahadur KC v HMRC [2026] TC10014, the First Tier Tribunal (FTT) held that HMRC had correctly registered a takeaway business for VAT. It had been acquired as a going concern, so the value of taxable supplies for the year before the transfer could be taken into account in testing whether the VAT registration threshold had been exceeded.
HMRC have published 'Revenue & Customs Brief 10 (2026): Temporary zero rate of VAT for domestic electricity in Great Britain’. It specifies how the temporary zero rate of VAT for qualifying supplies of electricity in Great Britain will operate.
HMRC have published 'Revenue & Customs Brief 8 (2026): UK VAT refunds for non-UK businesses in a VAT group'. It explains changes to how non-UK businesses in a VAT group should make future UK VAT refund claims, including transitional arrangements and how to ask HMRC to reconsider claims made since 1 January 2021 that have been refused.
In Luxurico Ltd v HMRC [2026] TC10001, the First Tier Tribunal found that input VAT was recoverable on a luxury vehicle hire business's acquisition of a hypercar. The taxpayer's intention at the time of purchase, and not necessarily subsequent use, was key in determining allowability.
HMRC have published 'Revenue & Customs Brief 9 (2026): VAT liability of supplies of education by alternative providers of higher and further education’. It provides an update on HMRC’s position on the VAT treatment of supplies of education and closely related services provided by alternative providers.
