Tag Archives: HMRC-publications

VAT: New, important HMRC guidance for zero-rating exports

By   10 March 2026
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HMRC has updated its Notice 703 which explains the conditions for VAT zero-rating exports of goods. It is crucial for a business to have the correct documentation to evidence goods physically moving out of the UK. 

Information on official evidence has been updated in paragraphs 6.2, 7.1 and 7.2 as follows:

  • Para 6.2 Official evidence

Official evidence is an export declaration for the goods submitted to the Customs Declaration Service which has generated a departure confirmation. You will need the Movement Reference Number (MRN) or Declaration Unique Consignment Reference (DUCR) of the declaration. 

  • Para 7.1 Air and sea freight 
  • If you are using commercial transport documents as proof of export for goods exported outside the UK or EU by:
    • air — you must obtain and retain an authenticated basic master airway bill or house air waybill endorsed with the flight prefix and number, and the date and place of departure
    • sea — you must keep one of the copies of the bill of lading or sea waybill along with a note of the export declaration Movement Reference Number (MRN) or Declaration Unique Consignment Reference (DUCR) or, where a shipping company does not issue these, a certificate of shipment (certifying actual shipment) along with a note of the export MRN or DUCR, given by a responsible official of that company.

  • 7.2 Road freight

    The international consignment note provides evidence of the identity of the contracting parties when goods are transferred by road. It is in 3 parts and is completed and signed by the sender of the goods, the carrier and the person receiving the goods. If the international consignment note is used as part of the evidence, it is important that the information is complete and all the details legible. Where the overseas customer arranges for the goods to be collected ex-works the international consignment note alone is not conclusive evidence that the goods in question have left the UK. Read paragraph 6.6 for additional evidence required when making an indirect export.

    Where goods leave through a port using the Goods Vehicle Movement Service, you should retain the Goods Movement Reference of the vehicle for that journey. 

Failure to produce the appropriate and accurate evidence will result in output tax being due on the relevant goods. 

Updated Guidance on Zero-Rated VAT for UK Exported Goods and Customs Processes

By   17 February 2026
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HMRC has updated its guidance on applying zero-rated VAT to goods exported from the UK – VAT Notice 703.

The amendments reflect the latest legal requirements (the latest force of law) and customs processes as of 13 February 2026 and removes outdated customs terminology and guidance.

Summary

Goods exported from the UK can be zero‑rated provided they physically leave the UK and all HMRC conditions are met. Notice 703 sets out who can apply zero‑rating and the legal basis under the VAT Act 1994.

Conditions & time limits: Exporters must ensure goods are exported within specified time limits (generally within three months, but longer in some cases) and meet detailed conditions depending on whether the export is direct, indirect, or in special scenarios (eg; retailers, ships, aircraft).

Evidence & record‑keeping: Zero‑rating is only valid if acceptable proof of export is obtained and retained (such as customs declarations and commercial transport documents), with clear rules on records, customs systems, and compliance checks.

In order to zero-rate a supply, it is vitally important that exporters obtain the correct evidence that goods have physically left the UK and that all descriptions of the goods are accurate and satisfy HMRC requirements. There has been a significant amount of case law on export documentation (an example here) which illustrates that this is often an area of dispute.

VAT: Private schools guidance updated

By   10 February 2026
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HMRC has updated its guidance on charging and reclaiming VAT on goods and services related to private school fees.

Since 1 January 2025, all education services and vocational training provided by private schools in the UK for a charge have been subject to standard rated VAT.

The guidance explains how some payments and situations relating to education are treated for VAT. It covers how to check if VAT is due on payments linked to private school fees and what VAT can be reclaimed.

Updates

The example of parents contracting and paying therapists directly and the example of a school supplying education and therapy under separate fees have been updated to add clarity. Also, information on the VAT implications for fee-paying sixth forms and further education providers has been updated.

HMRC to end postal letters

By   21 January 2026
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No more snail mail.

HMRC has announced that it will end most postal letters from Spring 2026.

It will begin phasing out hard copy letters in favour of a ‘digital by default’ communication model. This shift is designed to modernise the tax system, improve communication speed, and save approximately £50 million annually in printing and postage costs by the 2028/29 tax year. 

Taxpayers who use the HMRC app will stop receiving paper letters automatically and will receive an email notification of when correspondence is available to view online.

The transition will start in spring 2026 and expand gradually as systems are updated. Paper letters will not disappear entirely. They will continue to be sent to those who are digitally excluded, such as the elderly or disabled, as well as those who actively opt out. 

VAT: Removal of linked goods concession

By   20 January 2026
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HMRC has published Revenue and Customs Brief 1 (2026): Removal of the linked goods concession

This brief confirms that the Extra Statutory Concession (ESC) described in paragraph 3.7 of Notice 48 is no longer required. HMRC considers that the supplies previously eligible to be treated as single supplies under the concession should be treated as single supplies under the legislation, as confirmed by existing case law.

Examples of such cases: here, here here here and here. 

Businesses should now refer to HMRC’s policy as described in VATSC11113 – Supply: Single and multiple supplies: HMRC’s approach: The general approach.

Note

A VAT ESC is a formal relaxation by HMRC permitting a tax treatment not strictly permitted by law, to resolve minor anomalies, prevent hardship, or simplify administration. These provide businesses relief they would not otherwise get, but it has no legal force and isn’t for tax avoidance.

VAT: Partial exemption – HMRC guidance updated

By   13 January 2026
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HMRC Publications

HMRC has updated its Notice 706 on partial exemption. This guidance explains partial exemption and the methods and calculations a business may use to calculate the amount of input tax it can recover. 

More detailed guidance has been added to Paragraph 10.2 on a company’s sale of existing shares.

VAT treatment of the supply of locum doctors

By   16 December 2025
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HMRC has issued Revenue and Customs brief 9 (2025)  which covers the VAT liability of the supply of temporary medical staff (locum doctors).

This change to HMRC’s previous view (that these supplies were taxable) is a consequence of the First-Tier Tribunal’s decision in Isle of Wight NHS Trust case which ruled in favour of the Trust, finding that the supply of locums is an exempt service. 

The Brief also provides guidance for businesses who wish to claim a refund of overdeclared output tax following the decision.

VAT Grouping: Protection of the Revenue

By   9 December 2025
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The salient amendments are to the references to ‘protection of the revenue’ and ‘Revenue loss’.
VAT grouping is a facilitation measure by which two or more entities can be treated as a single taxable person (a single VAT registration) for VAT purposes. The measure was once restricted to “Bodies Corporate” which includes; companies of all types and limited liability partnerships. However, from 1 November 2019, grouping is additionally available for all entities, including; partnerships, sole traders and Trusts in certain cases.
HMRC has the vires to refuse an application for a VAT group, or remove a member if HMRC consider that it may lead to a VAT loss.

The Change

“The definition of ‘protection of the revenue’

Where this is considered necessary for the protection of the revenue, the VAT grouping legislation gives HMRC the power to:

  • prevent a person joining a VAT group
  • remove an existing member from a VAT group

We usually will not use our protection of the revenue powers if the revenue loss follows from the normal operation of grouping. If we feel that the revenue loss does not follow the normal operation of grouping, then we would consider using our protection of the revenue powers, such as:

  • where we identify enhanced risks to the collection of revenue
  • the use of VAT avoidance and distortion in the liability of the group’s supplies

In this context, ‘revenue loss’ means the VAT that is not charged when one company in a group sells to another company in the same group. This usually happens when one or more companies in the VAT group cannot reclaim all the VAT they pay because they make supplies that are exempt from VAT.

We will use our revenue protection powers if it looks like the main reason for VAT grouping someone is to ignore supplies from that company’s overseas branches to other members of the VAT group.

This applies whether that person is established in the UK or has a UK fixed establishment”.

VAT: New guidance on using postponed VAT accounting

By   2 December 2025
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HMRC has published (on 28 November 2025) a collection of new guidance on postponed VAT accounting (PVA).

The guidance covers what a business needs to do if it is using PVA to account for import VAT on its VAT returns.

The publication brings together all PVA guidance, giving detailed information about: