Deeks VAT News – Autumn Budget November 2025 – Budget Edition Keeping you and your clients compliant and clever

Welcome to the Autumn Budget 2025 Special

If you felt a small disturbance in the accounting universe on 26 November, don’t worry, it wasn’t a spreadsheet outage. It was Rachel Reeves delivering her first Autumn Budget.

And she certainly delivered. From VAT reforms to new indirect tax measures and a future of compulsory e-invoicing, there is a lot for accountants, advisors, solicitors and business owners to digest.

Here is your clear, practical breakdown of everything that matters.

• Major VAT announcements
• Indirect tax changes
• HMRC briefs and policy papers
• What the changes mean for you and your clients

VAT Headlines from the Autumn Budget 2025

Private Hire Vehicles Removed from TOMS (from 2 January 2026)

The government confirmed that private hire and taxi services will no longer fall within the Tour Operators’ Margin Scheme unless they are supplied alongside other qualifying travel services.

HMRC has issued Revenue & Customs Brief 8 (2025), setting out how operators should apply the revised rules.

Impact: Operators providing standalone PHV services must prepare to move to normal VAT rules. Operators that believe they meet the TOMS criteria are eligible to submit a claim to HMRC and have it stood behind the Bolt cast that HMRC have appealed to the Court of Appeal. This should be considered as a protective measure to ensure no VAT quarters fall out of time, under the 4 year rule.

Mandatory E-Invoicing (from April 2029)

From April 2029, all VAT invoices for business-to-business and business-to-government transactions must be issued in a specified electronic format.

A full implementation roadmap will be released with the 2026 Budget.

Impact: Accounting and invoicing systems will need early and significant preparation.

Cross-Border VAT Grouping: Rules Reverted (effective 26 November 2025)

The government has returned to the UK’s pre-Skandia position. Overseas establishments of UK VAT-grouped entities continue to be treated as part of that group, even if located in EU states that do not recognise whole entity grouping.

HMRC confirmed this in Revenue & Customs Brief 7 (2025).

Impact: VAT groups that previously accounted for VAT based on HMRC’s post-Skandia view may now have overpaid VAT and could be eligible to reclaim it. Please contact us if you require assistance preparing and submitting a VAT reclaim.

New VAT Relief for Business Donations to Charity (from 1 April 2026)

A new relief will apply to goods donated by businesses to charities for distribution to people in need, or for use directly within the charity’s services. This expands the existing relief, which applies only to goods donated for resale.

Impact: A positive change for retailers, manufacturers and any business dealing with surplus stock.

Motability Scheme: VAT and IPT Changes (from 1 July 2026)

More expensive Motability vehicles will attract VAT at 20 percent on top-up customer payments. Insurance Premium Tax at 12 percent will also apply to certain insurance contracts.

Vehicles designed or permanently adapted for wheelchair or stretcher users remain exempt from these changes.

Impact: Customers opting for higher-spec Motability vehicles may see increased overall costs.

Other Indirect Tax Measures

Customs Duty on Low-Value Imports Removed (by March 2029)

Relief for goods valued at 135 pounds or less will be withdrawn, making such imports subject to customs duty.

Impact: Online retailers and marketplaces should prepare for increased costs and compliance obligations.

So make the most of your Shein and Temu shopping before March 2029.

Remote Gambling Taxes Reformed

Remote Gaming Duty increases from 21 percent to 40 percent from April 2026. A new remote betting rate of 25 percent will apply from April 2027. Remote horserace betting remains at 15 percent. Bingo Duty will be abolished from April 2026.

Impact: Large financial implications for online gambling operators.

Electric Vehicle Excise Duty (EVED) Introduced (from April 2028)

Electric cars will be charged 3p per mile, and plug-in hybrids 1.5p per mile. The consultation is open until 18 March 2026.

Impact: Fleet operators and EV owners will need to plan for increased running costs.

Hopefully this will be reversed before it’s implemented, as it seems a disincentive to buy an EV.

The cut continues for five months, followed by phased increases: 1p on 1 September 2026, 2p on 1 December 2026, and 2p on 1 March 2027. RPI indexation resumes in April 2027.

Impact: Businesses with fuel-heavy operations must factor staged rises into future budgeting.

Carbon Border Adjustment Mechanism (CBAM)

CBAM will commence on 1 January 2027, though indirect emissions will not be included before 2029.

Impact: Importers of carbon-intensive goods should prepare for new reporting duties.

Need More Detail?

HMRC has released supporting briefings, consultation responses and policy papers on these measures.

For specialist VAT advice for all industries:

jane@deeksvat.co.uk 07710 553831  LinkedIn  

louis@deeksvat.co.uk 07446 321371 Linkedin