VAT relief on donations: good news for stock-heavy businesses
From 2026, businesses will get VAT relief when donating goods to charity (for qualifying uses).
If you:
- Hold significant stock
- Regularly write off obsolete or end-of-line goods
this could turn waste into impact, and improve your tax position.
PHV operators and Motability changes
- Some Private Hire Vehicle (PHV) operators will be pushed out of the Tour Operators’ Margin Scheme and into normal VAT rules.
- Motability-style schemes lose relief on certain top-up payments and face standard IPT on related insurance.
If you work in these sectors, this directly affects your pricing and margins.
Cross-border VAT groups
The UK is reverting to whole-entity grouping for VAT purposes. For larger or international groups, this changes how intra-group supplies are treated and can impact cashflow.
Action steps
- If you donate stock, speak to your accountant
Put a process in place so donations are tracked and relief is correctly claimed. - PHV or Motability-related businesses
Model the new VAT cost into your pricing before it hits, rather than absorbing it. - Group structures
If you’re part of a group, ask for a VAT group review to see if you’re optimally structured under the new rules.
How can we help at MDH
Book a quick tax chat with me, no strings attached. We’ll have a look at your situation and spot opportunities you might be missing. And as a thank-you, I’ll send you a free copy of our book 75 Ways to Pay Less Tax, packed with simple, practical tips you can put to work straight away. Let’s make sure your money’s working smarter, not harder.
