UK’s VAT Collection Dips After Tax Authority Methodology Changes

The UK’s value-added tax collection has been revised downward following a change in the methodology by the tax authority.

VAT receipts have now reduced by £1.7 billion ($2.2 billion) for tax year 2022-23, £0.5 billion for 2023 to 2024 and £0.7 billion for 2024-2025 so far, according to a release by His Majesty’s Revenue and Customs on Friday.

This revision is less than 1% of total VAT receipts across this period, HMRC said.

The change is due to the UK tax authority’s decision in August 2024 to align annual VAT receipts to its cash-based accounts.

• Under the system, ...