- Purpose and Update: This brief replaces previous Revenue and Customs Briefs related to the CJEU’s Skandia judgment, clarifying HMRC’s updated position on the VAT treatment of intra-entity services within UK VAT groups that include establishments in EU member states. The new guidance, effective from November 26, 2025, allows these overseas establishments to be treated as part of the UK VAT group.
- Revised VAT Treatment: Under the new interpretation, businesses no longer need to apply the reverse charge mechanism for certain intra-group services previously required by earlier guidance. This change reflects a revised understanding of existing UK VAT law and does not necessitate any legislative changes.
- Reclaiming Overpaid VAT: VAT groups that have previously accounted for VAT under the reverse charge mechanism may now be eligible to reclaim any overpaid VAT through an error correction notification. The brief provides details on the process for correcting VAT errors and highlights the need to consider anti-avoidance legislation when submitting these notifications.
Source gov.uk
See also
- C-7/13 (Skandia) – Judgment – Supply of services between head office and branch part of VAT group constitutes a taxable transaction
- Roadtrip through ECJ Cases – Focus on ”VAT Grouping” (Art. 11) – VATupdate
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