VAT groups
VAT groups

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • VAT groups
  • Eligibility for VAT group membership
  • What are the consequences of VAT grouping?
  • How to register, change or disband a VAT group
  • Anti-avoidance rules affecting VAT groups

Many companies operate in groups, broadly meaning that they are under common economic ownership. The existence of groups of companies is recognised in many different areas of the tax legislation. For an overview of these rules, see: Tax groupings—overview.

VAT grouping means that the members of the group are treated as a single taxable entity for VAT purposes. Supplies that are made by or to any member of a VAT group are treated, for VAT purposes, as made by or to one particular member of that group that is nominated for these purposes and referred to as the 'representative member'. Supplies made between members of the same VAT group are normally ignored for VAT purposes. In addition, members of a VAT group are jointly and severally liable for one another's VAT debts.

This Practice Note is about:

  1. eligibility for membership of a VAT group

  2. the consequences of being in a VAT group

  3. the rules on applying for VAT group registration, and

  4. anti-avoidance rules affecting VAT groups

Eligibility for VAT group membership

Under EU legislation, each Member State is permitted to treat independent legal persons established in the territory of that state as a single taxable person where such persons are closely bound by financial, economic and organisational links.

As of exit day (31 January 2020) the UK is no longer an EU Member State. However,