TITLE: Key VAT and Customs Changes: Deadlines Every Business Must Track This Week
This week brings important changes and proposals for UK businesses, international sellers and digital commerce operators.
HMRC has changed how some non-UK VAT group members claim UK VAT refunds. The UK is considering wider marketplace VAT liability. The EU has approved a major customs reform that will increase responsibilities for platforms selling imported goods.
You should also prepare for new EU small-parcel requirements and the temporary 0% VAT rate for qualifying domestic electricity supplies in Great Britain.
Act now: the five deadlines and changes to track
Use this short list to prioritise your compliance work:
- 31 December 2026: Deadline for transitional UK VAT refund claims covering the prescribed year from 1 July 2025 to 30 June 2026.
- 31 August 2027: Final date to ask HMRC to reconsider certain previously refused UK VAT group refund claims.
- 1 November 2026: EU Product Identifiers become mandatory for relevant distance sales of imported goods.
- From 1 November 2026: An EU-wide small-parcel handling fee is expected, although the Commission has not yet fixed the amount or detailed application rules.
- 1 October 2026 to 31 March 2027: Qualifying domestic electricity supplies in Great Britain move temporarily to 0% VAT.
These measures affect VAT reporting, cash flow, product data, customs declarations and marketplace reconciliation. Do not wait for your next year-end review. Start checking your transaction and logistics data now.
Submit separate claims for non-UK VAT group members
HMRC’s Revenue and Customs Brief 8 (2026) restores the position that applied before 1 January 2021.
Each eligible non-UK business in a VAT group must now submit its own claim for UK VAT it incurred. The UK VAT group’s representative member cannot submit a combined claim unless it incurred the VAT itself.
This matters if your international group has:
- A non-UK company that incurs UK travel, professional or operating costs.
- A VAT group structure in another country.
- A representative member that previously submitted refund claims for other group entities.
- Historical claims rejected because the representative member did not submit them.
Use the transitional rule before 31 December 2026
For VAT incurred during the prescribed year from 1 July 2025 to 30 June 2026, HMRC will accept a claim from either:
- The individual group member that incurred the VAT; or
- The representative member of the VAT group.
The claim must be submitted by 31 December 2026. Missing this deadline can result in the refund being lost.
Request a review of historic refusals
HMRC will review certain claims for VAT incurred from 1 January 2021 where the claim was refused because the representative member did not submit it. The VAT must not have been included in a later claim by the representative member.
Request a review by emailing newcastle.oru@hmrc.gov.uk with the subject line:
Reconsideration of a previously refused VAT group claim
Include the business name, ORU reference, claim number, claim period, claim value, decision date, full group member details and confirmation that the VAT was not claimed later.
This process is separate from ordinary VAT return filing. Organise the invoices, claim schedules and refusal letters now so you can support the request.
Monitor the UK marketplace VAT proposal
HMRC and HM Treasury closed their consultation on 18 August 2026. The proposal would extend marketplace VAT liability to certain domestic B2C sales by UK businesses where goods are located in the UK at the point of sale.
The proposal covers online marketplaces and may include takeaway and delivered food platforms. It does not currently apply to B2B sales.
The lead option is a £90,000 Minimum Platform Threshold per platform. If adopted, a marketplace could become responsible for accounting for VAT on qualifying sales once a UK business exceeds that level on the individual platform.
However, this is not law yet. A further technical consultation and legislation would be required. Current rules have not changed.
Prepare for the possible cash-flow effect
Under the proposal, the marketplace would collect VAT from the customer and report it on its own VAT return. The seller’s supply to the marketplace would generally be treated as a deemed zero-rated supply under the proposed design.
You could therefore see:
- Less VAT cash held by your business before filing.
- Changes to marketplace settlement reports.
- New reconciliation requirements between gross sales, VAT collected, fees and payouts.
- Different treatment for sales through your own website, physical premises and other platforms.
- Complications for sellers using the Flat Rate Scheme.
- Additional uncertainty for second-hand goods sold under the margin scheme.
Do not change your VAT treatment based on the consultation alone. Instead, model the impact using your current sales by platform. Keep separate records for marketplace sales, direct sales, B2B supplies and second-hand goods.
Reliable VAT return services UK businesses can use should reconcile each channel before the return is prepared. This helps you identify discrepancies before they become filing errors or cash-flow surprises.
Prepare for the EU’s customs overhaul
On 3 September 2026, the Council approved its position on the recast Union Customs Code. The Council’s official announcement describes the reform as the most comprehensive EU customs overhaul in decades.
The final legislative process is still relevant. The European Parliament is expected to approve the text later in September, followed by signature and publication in the Official Journal.
The reform will make non-EU ecommerce platforms and distance-sale operators responsible for customs formalities and duty payments when they are treated as the importer for distance sales. The final EU consumer should no longer carry the main customs burden in these transactions.
The reform also creates:
- A new EU Customs Authority based in Lille from 2027.
- An EU Customs Data Hub.
- Stronger data-sharing and risk controls.
- New penalties for non-compliant ecommerce operators.
- Potential fines of up to 6% of annual import value in serious cases.
- Market access restrictions and removal of customs privileges.
Ecommerce platforms should begin improving product, seller and shipment data. UK retailers dispatching goods from Great Britain should review product classification, origin and basket composition before sending goods into the EU.
Review EU small-parcel costs and product data
The European Commission’s offi cial guidance confirms that from 1 November 2026, EU Product Identifiers will become mandatory for relevant distance sales of imported goods. This applies to low-value consignments, and sellers must ensure their product data meets the new standards to avoid delays or refusals at the border.
Additionally, the Commission has signalled an EU-wide small-parcel handling fee expected to apply from the same date. While the precise amount and detailed application rules have not yet been fixed, logistics and compliance teams should prepare for additional costs per parcel and adjust their pricing models accordingly.
Review your current shipment data, seller information, and product classifications now. Gaps in data quality will lead to higher costs and slower clearance once the rules are fully in force.
