Here is a summary of the 2026 Budget VAT measures. These could potentially affect your clients’ pricing, contracts, transactions and accounting systems.
Summary of the measures
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Social housing providers and landowners selling to them
Zero rating for qualifying land sales from 1 April 2027.
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Overseas service providers supplying non-VAT-registered UK businesses
Overseas suppliers to non-VAT-registered UK businesses must charge and account for UK VAT from April 2027 as the reverse charge will no longer apply, so recipients will not have to take account of the value of imported services for VAT registration purposes.
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Online marketplaces and UK sellers
Marketplace VAT liability changes from 1 October 2027, covering relevant sales by VAT-registered sellers and non-registered sellers exceeding £90,000 annually per marketplace.
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Travel businesses, including tour operators
VAT and TOMS review. Call for evidence closes 31 January 2027.
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Larger taxi and private hire operators
From 2 January 2028 passenger transport supplied through larger operators will be treated as supplied by the operator, not the driver. VAT will be due on the full fare. The proposed larger operators £50m turnover threshold remains subject to consultation.
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Domestic electricity suppliers
The 0% VAT rate, effective from 1 October 2026, is extended to 31 July 2027.
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Businesses will be required to issue and receive VAT e-invoices
Mandatory e-invoicing from 1 April 2029, with key requirements due to be finalised between October 2027 and April 2028. A consultation has also been launched on the future use of e-invoicing digital reporting – the consultation closes on 20 January 2027.
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Direct Debit payment of VAT
Payment by direct debit will be required from April 2029.
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Public and workplace EV charging suppliers
20% VAT confirmed from 1 November 2026.
This page is a summary provided for information only and does not constitute VAT advice.
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