- HMRC has reversed its position on cross-border VAT grouping involving EU branches, restoring the ‘whole entity’ principle.
- The change undoes the impact of the CJEU Skandia decision and applies retrospectively from 26 November 2025.
- UK VAT groups with EU branches can now reclaim overpaid VAT by submitting error correction notifications.
- The policy change affects businesses with UK VAT groups containing EU establishments and contrasts with the approach taken by Ireland and most other EU states.
- No legislative amendment is required for this change.
Source: pinsentmasons.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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