In the know: VAT - Issue three | Insights

VAT compliance is becoming more demanding, and the cost of getting it wrong is increasing. The June 2026 edition of 'In the know: VAT' brings together the latest developments affecting businesses across sectors, with clear explanation of what has changed and what action you may need to take.

This edition covers a range of important updates, including:

changes to the VAT treatment of locum doctors – following a First Tier Tribunal decision, HMRC now accepts that supplies of temporary medical staff can be VAT exempt, with implications for employment businesses, NHS bodies and private healthcare providers, including the potential to reclaim historic VAT
getting compliance right in a higher-risk environment – with late payment interest now at 7.75%, the cost of VAT errors has increased; we look at how to manage errors effectively and build more resilient VAT processes
VAT in the hospitality sector – why applying the correct VAT treatment across food, drink, accommodation and promotional activity remains a persistent challenge in a sector already under cost pressure
VAT for charities – how to determine the correct treatment across multiple income streams, and why classification errors can directly affect input VAT recovery
extension of VAT relief on business donations to charity – a welcome change from April 2026, allowing a broader range of goods to be donated without triggering a VAT charge, subject to conditions
EV charging and VAT – a recent tribunal decision found that the 5% reduced rate applied to EV charging in certain settings, but HMRC is appealing and maintains its standard-rated position; businesses in this space should monitor developments closely
HMRC's growing use of data – what a more data-driven compliance environment means for VAT record-keeping and reporting transparency
Vaping Products Duty – coming into effect from 1 October 2026, with applications for approval already open; manufacturers, importers and retailers need to act now to avoid penalties.