Tag Archives: HMRC

VAT treatment of cryptoassets – new HMRC guidance

By Marcus Ward 19 October 2026

Following our previous articles on cryptoassets, HMRC has published a document: Help with VAT treatment of cryptoassets — GfC2.

This guidance sets out:

what HMRC means by cryptoassets
when a business needs to register
what information a business need to collect about your customers – and why
the rules about the place of supply for cryptoasset transactions
what records digital platforms and marketplaces need to keep

It is aimed at UK and overseas businesses involved in cryptoasset transactions where UK VAT may apply. It includes businesses that sell or exchange cryptoassets and businesses that operate platforms where other people do so.

Overview

Cryptoassets (sometimes called ‘tokens’ or ‘cryptocurrencies’) are a digital representation of value that are created, stored and transferred securely using public computer networks, and cannot be altered or destroyed.

There are many different types of tokens, and they can have different uses. Some tokens can represent ownership of something or the right to access particular goods or services. The asset, goods or services represented by the token are known as the underlying asset or supply. The underlying asset can be tangible or intangible, such as digital or physical art, music and collectables.

A non-fungible token (NFT) is a unique digital certificate that represents ownership of an asset. The VAT treatment of an NFT will depend on the asset it represents. For example, if the underlying asset is a piece of digital art, then the same VAT treatment as digital art will usually apply. If the underlying asset is a physical item, such as a car, then the same VATtreatment as a car will usually apply.

It is worth emphasising that there are no separate VAT rules for cryptoassets. VAT still depends on what you supply and how it is used, not the definition or description of a token

HMRC says that following these guidelines will help taxpayers reduce the risk of mistakes, VAT adjustments and penalties.

VAT: Exports – updated guidance

By Marcus Ward 13 October 2026

Zero-rated exports

HRMC has updated its internal guidance VEXP20300 on VAT exports.

This sets out the conditions for zero-rating an export.

It clarifies the requirements for zero-rating the indirect export of personal goods (The zero-rating applies as long as the goods do not travel in accompanied baggage) and emphasises the stricter evidential requirements for indirect exports.

HMRC new ‘VAT Assist’ service

By Marcus Ward 5 October 2026

VAT Assist

HMRC has announced a VAT Assist service which is due to be launched in April 2027.

The service will compare data added to a taxpayer’s VAT return against information HMRC holds for that business to provide incisive feedback to help businesses submit accurate tax returns.

The service will be available to businesses using participating third-party software and HMRC will monitor and review the relevance and effectiveness of the feedback provided.

The pre-submission VAT Return data is transmitted from third-party software to HMRC via an API. That data is analysed in real time, using a rule-based model, comparing to data held within HMRC. Where potential errors are identified, digital ‘nudges’ will be transmitted through the API for the third-party software to present to the taxpayer.

The message will be displayed to the taxpayer through their software before the return is submitted although the taxpayer is not required to act on the feedback and may proceed with their submission if they consider that the return is correct.

VAT: Collagen beauty drinks. The Minerva Research Labs Limited case

By Marcus Ward 21 September 2026

Latest from the courts

In the Minerva Research Labs Limited v HMRC [2026] UKFTT 1320 (TC) First-Tier Tribunal (FTT) case the issue was whether collagen beauty drinks are standard-rated, or zero-rated as food of a kind used for human consumption. In order to determine the correct VAT treatment, the Tribunal was required to apply a judicial ‘multifactorial test’. This meant assessing the product’s ingredients, appearance, marketing, and function to decide how an ordinary person would view the product.

Background

The appellant produces a range of collagen-based liquid supplements which are targeted at the health of skin, hair, and joints and muscles. The products are packaged in cartons containing small, single-use, mono-dose bottles.

Minerva initially accounted for output tax on the sale of the product. However, it subsequently submitted an error-correction claim which sought a refund of circa £3.64 million on the basis that the drinks should be zero-rated food. HMRC rejected the claim, prompting Minerva’s appeal.

NB: For VAT purposes, ‘food’ includes drink.

Decision

The FTT acknowledged that the products provide nutritional value; supplying a notable percentage of daily protein requirements alongside energy, vitamins, and minerals, but that nutritional density does not automatically equal food. It determined that:

the products were held out for sale as liquid beauty products
they were purchased for cosmetic and anti-ageing reasons
they were not marketed to be eaten instead of a meal, or as a snack
the words ‘dose’ and ‘treatment’ appeared marketing and packaging
the products were labelled with precautions or warnings (that food would not)

Consequently, the products were not food and standard rating applied.

The appeal was therefore dismissed.

Legislation

VAT Act 1994, Schedule 8, Group 1, item 1. Food of a kind used for human consumption.

Commentary

Another case on what is food. New products seem appear on a daily basis and the products themselves and marketing of the develop at a rapid pace as a result of changes to consumer tastes and health trends. Trying to fit modern foods into 1970s definitions (when VAT was introduced) will always cause absurd, contradictory results.

This case follows on from well-know cases such as: Jaffa Cakes, Mega Marshmallows, Walkers Sensations Poppadoms, Duelfuel Nutrition, and Greggs, sausage rolls as well as flapjacks, brownies and cereal bars. If there is any doubt about whether a ‘food’ product is covered by the zero-rating, we advise that expert advice is sought (we are happy to provide it!)

VAT: New guidance for fund management services

By Marcus Ward 15 September 2026

HMRC has published new guidance GfC20 on the sometimes complex subject of outsourced fund management services.

These Guidelines for Compliance (GfC) set out HMRC’s recommended approach and are designed to help businesses determine the correct VAT treatment of outsourced fund management services, including whether services should be treated as single or multiple supplies.

More on exemption for fund management services here

VAT: Electronic sales suppression (ESS) compliance checks

By Marcus Ward 8 September 2026

HMRC has published a new Factsheet CC/FS68A which provides information on electronic sales suppression (ESS). It explains the powers HMRC can use to help it identify and tackle ESS. It also explains the penalties which may be levied if a person is in possession of an ESS tool.

More details on ESS and ESS tools here.

HMRC powers

Finance Act 2022, Schedule 14 allows HMRC to issue an information notice for ESS. This means HMRC can ask for certain information that applies to ESS. It allows the issue of a Notice to a ‘relevant person’ for a ‘relevant purpose’.

Relevant Person

A ‘relevant person’ is any person who HMRC think may be liable to a penalty for being involved in ESS.

Relevant purpose

A ‘relevant purpose’ is the reason HMRC is asking for information about ESS and ESS tools.

The law allows HMRC to do this in three situations. These are to help HMRC:

decide whether a relevant person has made, supplied, promoted, or possesses an ESS tool and whether this person is liable to a penalty
understand how the ESS tool works
identify any other person who has made, supplied, promoted, or possesses the ESS tool.

VAT: EV charging points in new dwellings are zero-rated

By Marcus Ward 1 September 2026

HMRC has updated Notice 708 (para 13.8.1) on 26 August 2026 to include electric vehicle charging points in the list of accepted building materials ordinarily incorporated into a building or its site. These installations qualify for zero or reduced VAT rating when supplied alongside eligible construction or conversion services of the construction or conversion of new dwellings.

It should be noted that this zero/reduced rating only applies to EV charging points as part of residential construction and that standalone equipment sales and public EV charging services have different VAT rules.

VAT: Check if you need to register as a digital platform operator

By Marcus Ward 11 August 2026

HMRC has updated its Guidance Check if you need to register as a digital platform operator.

This guidance now includes various examples of what may qualify as a digital platform.

VAT: Update – Transfer of a registration number

By Marcus Ward 11 August 2026

Update – Request a transfer of a VAT registration number

Form (VAT68) has been updated. It is used to request HMRC to transfer a VAT registration number of a business that is the subject to a change in ownership, via a Transfer Of a Going Concern (TOGC) or a Change of Legal Entity (COLE).

VAT Groups – Updated HMRC guidance

By Marcus Ward 11 August 2026

HMRC has updated its Guidance on amendments to VAT groups.

It incudes information about who needs to submit form VAT50/51 has been added to the guidance, including information to confirm that if you are an employee, accountant or agent, you need to also provide a completed VAT53 form.

Details on VAT groups, including the pros and cons here.