Key VAT Updates for Summer 2026: What Welsh Business Owners Need to Know

16 hours ago
3 min read

The summer of 2026 has brought several VAT changes that will affect businesses across Wales. Some updates are already in force, while others are on the horizon. This article sets out the main points in plain language so you can stay compliant and plan with confidence.

Higher Thresholds for the Capital Goods Scheme

From Wednesday 29^th July 2026, the threshold for land, buildings and civil engineering works has increased from £250,000 to £600,000. This means fewer projects will fall into the scheme, which should simplify VAT adjustments for many businesses. Computers and computer equipment have also been removed from the scheme entirely.

If you invested in qualifying assets before 29^th July, the old £250,000 threshold still applies to that project. This transition rule is important for anyone who has made recent improvements to premises or infrastructure.

Digitisation of the Option to Tax

HMRC will launch a new online portal for option to tax matters before the end of 2026. Businesses will be able to submit elections, revocations and related information digitally. This should make the process faster and reduce paperwork.

Temporary VAT Cut on Children’s Activities

Running from 25 June to 1 September 2026, the temporary summer VAT cut reduces VAT from 20 per cent to 5 percent on a wide range of children’s and family activities. This includes admission to attractions such as museums, zoos, adventure parks, fairs and soft play centres, as well as children’s meals eaten on the premises. Adult tickets qualify too, provided the attraction offers a package family ticket which includes one child. Takeaway meals do not qualify. Businesses can choose whether to pass the saving on to customers, although the Government expects most to do so.

Consultation on Social Housing Land Sales

HMRC is consulting on a targeted zero-rate for the sale of land to registered social housing providers. The aim is to simplify arrangements and support earlier‑stage development. This will be relevant to property developers, housing associations and landowners.

E‑Invoicing and Future Digital Requirements

Although not immediate, HMRC has confirmed that the UK will adopt the Peppol network for e‑invoicing from 1^st January 2029. This is part of a wider move towards digital reporting and greater transparency. Businesses should begin reviewing their accounting systems and supply chains to ensure they can adapt smoothly.

What This Means for Welsh Businesses

These changes are part of a broader shift towards digital compliance and simpler VAT administration.

For most businesses, the key actions over the coming months will be:

Review capital projects to check whether the new thresholds affect your VAT adjustments.
Prepare for digital processes by ensuring your accounting software is up to date.
Update pricing if you offer qualifying children’s activities or meals.
Monitor HMRC consultations if you operate in property or development.
Plan for e‑invoicing to avoid last‑minute system changes.