Summaries of interesting VAT cases for the SME owner.
Incorrect advice provided by Artificial Intelligence (AI) and third-party websites is contributing to a growing trend of late VAT return filing and payment. HMRC are reminding agents and taxpayers that there is no deadline extension if the due date falls on a bank holiday or weekend.
HMRC have published 'Revenue & Customs Brief 3 (2026): VAT treatment of certain public funds received by further education institutions' in response to the Court of Appeal (CoA) ruling in HMRC v Colchester Institute Corporation [2026] EWCA Civ 363.
In Clearwater Hampers Limited v HMRC [2026] TC09843, the First Tier Tribunal (FTT) found that lidded wicker baskets supplied as part of a gift hamper were, for VAT purposes, ancillary to the food and drink supplied. They were not a separate standard-rated supply.
In Innovative Bites Ltd v HMRC [2026] TC09831, the First Tier Tribunal (FTT) again found in favour of Innovative Bites Ltd, holding that its 'Mega Marshmallows' were zero‑rated for VAT as food; they were not confectionery.
HMRC have published 'Revenue and Customs brief 9 (2025): VAT liability of the supply of temporary medical staff', which confirms that supplies of locum doctors qualify for the VAT exemption under Item 5, Group 7, Schedule 9, VAT Act 1994.
In Charge My Street Ltd v HMRC [2026] TC09802, the First Tier Tribunal (FTT) found that electric vehicle charging supplied at public charging stations qualified for VAT reduced rating.
In Aspire in the Community Services Limited v HMRC [2026] TC09789, the First Tier Tribunal (FTT) allowed recovery of input VAT on purchases made before the Effective Date of Registration (EDR). Under the pre-registration input VAT reclaim rules, there was no basis for taking into account pre-registration use.
