VAT, stamp taxes and other indirect taxes

VAT online marketplace liability: extension to UK suppliers

The Autumn Budget confirms that the existing VAT online marketplace liability rules will be extended to include sales by UK businesses. Online marketplaces will become responsible for collecting VAT on qualifying sales by UK businesses that are VAT-registered or exceed an annual sales threshold of £90,000 on an individual platform. The extension will apply from October 2027. The government’s stated objective is to tackle VAT evasion and support fair competition by preventing non-compliant businesses from undercutting those that pay the tax they owe.

For VAT registered UK businesses, marketplace collection will apply to all qualifying marketplace sales, regardless of sales value on an individual platform. For businesses that are not VAT registered, the £90,000 Minimum Platform Threshold applies separately to annual sales on each platform, rather than to aggregate marketplace sales. A non-VAT registered business with sales below £90,000 on every platform will therefore fall outside marketplace collection. Importantly, the measure does not alter businesses’ existing VAT registration obligations; exclusion from marketplace collection is not an exemption from those obligations.

The extension excludes sales of second-hand goods by UK businesses, which will remain subject to the usual VAT treatment rather than marketplace collection. Business-to-business sales of goods are also excluded, as are personal sales, including individuals occasionally selling their own belongings.

For affected taxpayers and platforms, the change is not solely a question of the amount of VAT due; transferring collection responsibility, while retaining transaction exclusions and a platform-specific threshold, will create implementation and accounting challenges. HMRC acknowledges that accounting changes may be needed but leaves the detail to forthcoming guidance which will be published before implementation in 2027. The policy offers a targeted means of addressing non-compliance which may be welcomed by online marketplaces and UK businesses, but the operational detail will be important to assessing the compliance burden on marketplaces and affected UK businesses.

VAT reverse charge for overseas services

The Autumn Budget announced that the government will legislate in Finance Bill 2026/27 to restrict the VAT reverse charge for business-to-business supplies of services from overseas to cases where the receiving UK business is VAT registered. The change will take effect from April 2027.

Where the UK business receiving the services is not VAT registered, the overseas supplier will instead be required to charge and account for UK VAT. The recipient’s VAT registration status will therefore determine whether the reverse charge applies or whether the overseas supplier must account for the tax. The announcement concerns services supplied from overseas, rather than a general reform of the reverse charge.

The Autumn Budget presents the restriction as a confirmed legislative commitment, not a new consultation. However, the extract does not specify whether this will be restricted to specific services, how customer status should be determined, transitional arrangements or a precise commencement date within April 2027.

For overseas service suppliers to UK non-VAT registered businesses, these new rules will give rise to UK VAT registration and compliance requirements which will increase the cost of providing the service, aside from the additional VAT charge.

VAT deeming rule for private hire vehicle operators

The Autumn Budget announces a change to the VAT treatment of taxi and private hire passenger transport services supplied through an agent, taking effect from 2 January 2028. The government will introduce legislation in the Finance Bill to deem the services to be supplied by the agent rather than the driver. An operator within scope will therefore have to charge VAT on the full value of the fare.

The deeming rule will apply only to businesses whose annual fare turnover exceeds a specified threshold. Crucially, that threshold has not been settled: £50m annual fare turnover is the lead option, not a confirmed limit. The government plans to consult in due course on the threshold, with the consultation also supporting final policy design and implementation. The announcement therefore confirms the intended legislative change and commencement date, while leaving material aspects of its scope and operation for further development.

This appears to be another tweak to the legislation following DELTA Merseyside Ltd v Uber Britannia Ltd and Bolt Services UK Ltd. The proposed deeming rules may bring some more consistency to the VAT treatment of taxi and private hire transport going forwards.

TOMS: review of the VAT treatment of travel services

The Autumn Budget’s call for evidence reviews whether the Tour Operators’ Margin Scheme (TOMS) should be reformed or withdrawn, alongside the VAT treatment of travel services supplied outside the scheme and by overseas operators. Open from 28 October 2026 to 31 January 2027, it affects tour operators, wholesalers and business purchasers of travel, including the meetings, incentives, conferences and events sector. Options include full or partial withdrawal, optional participation by transaction or whole business, restoring zero-rating for margins attributable to qualifying passenger transport, and replacing annual adjustments with quarterly or supply-by-supply calculations. The call for evidence also questions existing concessions, including the transport company scheme and elements of hotel billback arrangements.

This review appears to be running in parallel with the EU reform package for TOMS which is due to be published at the end of 2026. Presumably, the UK will be looking to somewhat align with the EU measures given the interdependence between EU and UK tourism markets.

VAT on social housing

The Autumn Budget confirms that the government will proceed with a new VAT zero rate for land sold to registered providers of social housing, with effect from 1 April 2027. Secondary legislation will be laid in early 2027. The decision follows the consultation announced at Budget 2025, which opened on 23 June 2026 and closed on 18 August 2026.

The government accepts that the current VAT treatment affects development sequencing, funding, risk allocation and the timing of title transfers, and that structuring around these tax consequences can impede the efficient delivery of social housing. Currently, it is often necessary to change the timing of transactions to enable “golden brick” stage to be reached, but this can have difficult interactions with the stamp duty land tax position, particularly where grant funding may be available.

Importantly, the government intends to target the relief at any land sold to a registered provider of social housing, as defined in existing VAT legislation, rather than make eligibility conditional on the land’s use. This is broader than a relief confined to land intended for social housing construction: the government considers that acquisitions for wider uses are still likely to support a registered provider’s social housing purpose. The purchaser-based approach is intended to be more administratively manageable for HMRC and to avoid complexity associated with mixed-use developments. However, the precise statutory scope will matter for subsidiaries, joint ventures and other structures that deliver social housing but not necessarily through a registered provider.

The intended practical effect is to allow a relevant housing association to acquire land before the golden brick stage, rather than delaying ownership transfer until the supply qualifies for zero-rating under another relief. Earlier acquisition should support earlier title transfer and reduce reliance on staged transactions and complex contractual chains. Respondents identified potential benefits for funding access, cashflow, financing and legal costs, alongside SDLT inefficiencies arising from VAT-inclusive land values. The response does not announce the withdrawal of golden brick arrangements; how the new relief interacts with those arrangements and the option to tax regime remains to be seen.

Extending the electricity VAT zero rate to July 2027

The Autumn Budget confirms a three-month extension of the temporary 0% VAT rate for qualifying domestic electricity supplies, taking the relief to 1 July 2027. The reduction from 5% to 0%, initially introduced for six months from 1 October 2026, will therefore cover nine months in total.

HM Treasury expects the extension to take around £50 off the annual Ofgem price cap in April 2027, although actual household savings will depend on consumption and future electricity prices. The policy scorecard records revenue reductions of £755m in 2026/27 and £305m in 2027/28 for the full nine-month VAT cut, not separately for the extension. The extension provides further temporary support, but the Autumn Budget does not specify the legislative route, detailed eligibility, billing and transitional rules, or the VAT treatment after 1 July 2027.

VAT and Climate Change Levy treatment of EV charging

The Autumn Budget announces that legislation will be included in the Finance Bill to clarify that electricity supplied through publicly accessible and workplace electric vehicle charging points is subject to 20% VAT. The legislation will take effect from 1 November 2026. The measure comes in the wake of the recent FTT decision in Charge My Street Ltd v HMRC [2026] UKFTT 318 (TC), which held that certain public EV charging supplies could qualify for the reduced 5% VAT rate. It’s worth noting that HMRC has been granted permission to appeal the decision to the Upper Tribunal.

Separately, the legislation will confirm that this electricity is not treated as domestic use for Climate Change Levy purposes.

VAT e-invoicing

The Autumn Budget confirms that VAT invoices will have to be issued in a specified electronic format from 1 April 2029. The government will introduce enabling legislation in the Finance Bill allowing HMRC to make regulations requiring VAT invoices to be both issued and received in a prescribed electronic format. It has published an implementation roadmap and commits to providing full policy and technical design details by April 2028. The measure forms part of the tax administration modernisation programme outlined in HMRC’s Transformation Roadmap, with the stated objectives of reducing administrative burdens and improving efficiency.

Alongside the confirmed e-invoicing requirement, the government is consulting on how the structured invoice data could be used in future, including for digital reporting. The consultation closes on 20 January 2027. For businesses, the immediate focus appears to be preparing to issue and receive invoices in the required electronic format from April 2029.

Changes to SDLT group relief

SDLT group relief is typically available for transfers of property in England and Northern Ireland between members of the same SDLT group, but may be withdrawn in certain circumstances. Most notably, this is where the purchaser ceases to be a member of the same group as the vendor within three years of the effective date of the property transaction, at a time when the purchaser owns the property acquired.

Under the current SDLT legislation group relief is not withdrawn where the purchaser ceases to be a member of the same group as the vendor by reason of the vendor having been wound up, even if the purchaser subsequently leaves the group with the property concerned within the three-year period. This has enabled taxpayers to avoid a withdrawal of group relief by structuring arrangements so that the disposal of the purchaser out of the group takes place after the vendor has been wound up.

The Government does not consider this to be how SDLT group relief was intended to operate and will introduce amendments to the SDLT legislation via Finance Bill 2026/27. Pursuant to these changes group relief will be withdrawn in circumstances where the vendor has been wound up and there is a subsequent change of control of the purchaser within three years of the effective date of the property transaction.

This change will have effect from 29 October 2026.

Removal of SDLT on rent under assured tenancies

With effect from 1 May 2026, the Renters’ Rights Act 2025 removed fixed-term residential assured tenancies, replacing them with assured periodic tenancies.

Without amendments to the SDLT legislation, these changes would have meant subjecting tenants under assured tenancies to the complex SDLT rules applicable to periodic tenancies and the possibility of, at some stage, triggering SDLT filing and payment obligations for the tenant in relation to the rent they pay.

The government had previously announced its intention to legislate in Finance Bill 2026/27 to ensure an SDLT charge would not arise on the rent payable under tenancies which are assured tenancies for the purposes of the Housing Act 1988 (as amended by the Renters’ Rights Act 2025).

The government has confirmed Finance Bill 2026/27 will remove SDLT on rent paid under assured tenancies in England, effective from 1 May 2026.

SDLT relief for transfer of property to local government pension scheme pools

Finance Bill 2026/27 will introduce a new SDLT relief for transfers of land in England and Northern Ireland which is directly or indirectly held by a Local Government Pension Scheme (LGPS) administering authority to a “qualifying fund” established or managed by an LGPS asset pool company. These are transfers taking place as part of wider government reforms to drive consolidation and strengthen the management of LGPS investments to reduce operating costs, become more competitive and attract investment. The aim of the relief is to remove SDLT as an additional cost of mandatory pooling.

A qualifying fund for the purposes of this relief is a co-ownership authorised contractual scheme, a Reserved Investor Fund (Contractual Scheme) or an exempt unauthorised unit trust.

The relief applies to transfers of major interests in land, other than the grant of a lease, as well as to transfers of interests in property-investment partnerships that own a major interest in land. It is also available where the qualifying fund has acquired shares in a company that holds the land interest, rather than the land interest itself, but the land interest is subsequently acquired by the qualifying fund from the company concerned. That later acquisition of the relevant land interest is relieved from SDLT.

This relief, which the government had previously announced at Budget 2025, will apply to land transactions which have an effective date on or after 28 October 2026 and before 1 April 2032.

Soft drinks levy widened and rate increase

The Autumn Budget confirms that the government will legislate in the Finance Bill to widen the scope of the Soft Drinks Industry Levy (SDIL) from 1 January 2028, implementing changes announced at Budget 2025. The threshold at which soft drinks with added sugar become liable will fall from 5 grams to 4.5 grams of total sugars per 100ml, bringing drinks containing at least 4.5 grams but less than 5 grams within the levy’s scope. Existing exemptions for milk-based drinks and milk substitute drinks with added sugar will also be removed. A lactose allowance will be introduced to account for naturally occurring sugars in milk.

In addition, the Autumn Budget confirms that the government will legislate in the Finance Bill to increase Soft Drinks Industry Levy (SDIL) rates from 1 April 2027, implementing the uprating strategy announced at Autumn Budget 2024. The increase combines forecast CPI inflation with a catch-up increment reflecting inflation between 2018 and 2024. Chargeable drinks containing at least five but less than eight grams of total sugar per 100ml will attract SDIL of £2.25 per 10 litres; those containing eight grams or more will attract £3.01 per 10 litres.

From the same date, the Finance Bill will remove the SDIL registration requirement for producers making more than one million litres of liable soft drinks annually where they neither package nor import soft drinks. This is a targeted administrative simplification for producers with no liability to pay the levy because they undertake neither activity, rather than a new exemption from payment.

For affected businesses, the changes make both product composition and the removal of existing exemptions relevant to assessing future liabilities. The lactose allowance recognises naturally occurring milk sugars, but the overview does not specify its amount, calculation or detailed application, including how it will interact with the revised sugar threshold. The January 2028 scope changes are distinct from the SDIL rate increase taking effect on 1 April 2027, giving businesses separate implementation dates to address.

Deposit return scheme: VAT accounting

The Autumn Budget confirms that the government will legislate in the Finance Bill to transfer responsibility for accounting for VAT on unreturned deposits from individual drinks producers to the Deposit Management Organisation (DMO). The change, originally announced at Budget 2025, will take effect when the Deposit Return Scheme launches in October 2027. The scheme will introduce refundable deposits on single-use drinks containers, with the VAT change intended to simplify its administration.

For producers, the measure removes an individual VAT accounting obligation in relation to unreturned deposits rather than removing VAT from those deposits: the DMO will account for it instead. Centralising that responsibility should simplify producers’ administration, but at the moment it’s not clear how the DMO will calculate the VAT due or what supporting information producers will need to provide. It also gives no detailed accounting, reconciliation, or transitional rules. The Finance Bill will therefore be important in establishing the boundaries of the transfer, while the operational requirements remain a point for affected businesses to clarify ahead of the October 2027 launch.

Plastic packaging tax

The rate of Plastic Packaging Tax (PPT) will increase in line with the Consumer Prices Index from 1 April 2027. Businesses liable to PPT should factor the inflation-linked increase into their cost forecasts from April 2027.

Separately, following the May 2026 consultation, the government has confirmed that mandatory certification for mechanically recycled plastic will apply from 1 April 2030 to businesses claiming exemption on the basis that packaging meets the 30% recycled plastic threshold. It has published a summary of consultation responses.

Electronic sales suppression

The Autumn Budget confirms that the government will introduce mandatory software standards for Electronic Point of Sale and Mobile Point of Sale systems to tackle electronic sales suppression, also described as till fraud. It has published a summary of responses to the consultation launched on 23 June 2026. HMRC will undertake further technical engagement with industry and publish a technical consultation in summer 2027 setting out detailed implementation proposals. The government intends to legislate in a future Finance Bill, but the implementation date will be determined following further policy development and consultation.

A further technical consultation is planned for summer 2027, which will provide the next opportunity to scrutinise the implementation proposals. The commitment to mandatory standards establishes the policy direction, rather than a settled technical regime or commencement timetable. For businesses using these systems and their software providers, the next consultation will be important in assessing the changes required and the time available to implement them.

Machine Games Duty

The Autumn Budget confirms that liability for Machines Games Duty (MGD) on supplier-owned machines operated under profit-share arrangements will move to machine suppliers from 1 April 2028, through legislation in a future Finance Bill. Premises licence holders, permit holders, and pub tenants will remain liable where they own machines outright or use them under fixed rental or lease arrangements and control the takings. The government has launched a 12-week consultation on implementation, closing on 20 January 2027.

From 1 April 2027, MGD will increase from 20% to 25% for machines that allow a stake of more than £1 per game or offer a maximum prize of more than £100. The government links the increase to gambling harm associated with higher-risk machines and states that the revenue will help fund the business rates freeze for retail, hospitality, and leisure. Operators should review both maximum stakes and maximum prizes when assessing which machines will be affected.