HM Treasury has signed a short statutory instrument that puts Great British Nuclear on the public‑sector VAT refund map. The Value Added Tax (Refund of Tax to Great British Nuclear) Order 2026 was made on 17 March, laid on 18 March and takes effect on Wednesday 8 April 2026. The measure applies to the company designated as Great British Nuclear by the Secretary of State under the Energy Act 2023. The designation took effect on 31 January 2024, according to a notice published on GOV.UK. (gov.uk)

What the order actually does is simple: it admits a designated GBN into the UK’s section 33E refund scheme. That scheme allows named public bodies to reclaim VAT incurred on purchases used for their non‑business activities, bringing them closer to the position of central government departments. HMRC’s internal manual is clear that this relief is for non‑business functions only and sits alongside, not instead of, normal input tax rules. (gov.uk)

Why GBN qualifies is rooted in statute. Section 317 of the Energy Act 2023 lets the Secretary of State designate a company as Great British Nuclear, provided it is limited by shares and wholly owned by the Crown; that is precisely what the government did for the former British Nuclear Fuels Limited. The explanatory notes to the Act set out GBN’s role as an expert delivery body for new nuclear projects. (gov.uk)

For procurement teams, the practical change is that VAT charged by suppliers on qualifying, non‑business services becomes refundable to GBN through the section 33E process. HMRC guidance notes that claims are met from public expenditure rather than VAT receipts and should be made in‑year; VAT‑registered bodies reclaim through the VAT return (Box 4) and complete a VAT21, while non‑registered bodies use form VAT126. That affects how bids are evaluated and how cashflow is modelled across a financial year. (gov.uk)

A quick worked example helps. Take a £50 million managed IT services contract at the standard 20% VAT rate. Suppliers still invoice £60 million gross; nothing changes on their side. Previously, if the spend was non‑business and outside any refund scheme, VAT risked becoming a real cost. Under section 33E, GBN can reclaim the £10 million VAT through HMRC’s refund mechanism, reducing the steady‑state programme cost to the ex‑VAT figure, subject to eligibility and timing of claims. (gov.uk)

There are limits that finance directors should note. HMRC’s manual says refunds for section 33E bodies are presently confined to services listed in the Treasury’s Contracted‑Out Services (COS) Direction; goods are generally outside scope. The Treasury’s COS Direction, referenced publicly via The Gazette, also ties eligibility to non‑business use and bars retrospective effect. Procurement specifications therefore need to map service lines precisely to the COS headings. (gov.uk)

Classification matters. If GBN undertakes any activity that counts as “business” for VAT-charging for services, for example-those inputs fall under ordinary VAT rules and partial exemption, not the section 33E refund. The refund scheme is not a blanket waiver: it is a targeted correction for the VAT “wedge” on non‑business functions. Expect HMRC to scrutinise grey areas and insist on clean audit trails linking invoices to non‑business objectives. (gov.uk)

For suppliers, invoicing remains standard: charge VAT at the correct rate and follow normal evidence rules. The cashflow twist sits with GBN, which pays VAT upfront and recovers it later. Payment terms, milestone scheduling and claim cycles will therefore shape working capital. Smaller vendors should find price comparability easier-quotes can be built confidently on ex‑VAT rates, knowing VAT is neutral for GBN on eligible services. (gov.uk)

The timing intersects with a larger build‑out. Government documents confirm Wylfa in North Wales as the site for the UK’s first small modular reactor project, and state that Great British Energy – Nuclear will assess further sites. If non‑business programme activity ramps as expected, removing irrecoverable VAT on support services should reduce budget friction and improve like‑for‑like comparisons between in‑house and outsourced delivery. (gov.uk)

Two housekeeping points. First, HMRC’s published list of section 33E bodies (VATGPB9660) will need an update to reflect the new order; at the time of writing, the latest edition lists earlier entrants only. Second, HMRC says policy TIINs are published on GOV.UK; the TIIN for this instrument should set out any Exchequer impact and administrative costs once posted. We’ll update readers when those appear. (gov.uk)