VAT groups
VAT groups

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

  • VAT groups
  • Eligibility for VAT group membership
  • What is a body corporate?
  • Position prior to 1 November 2019
  • Meaning of 'established' and 'fixed establishment'
  • What is control for these purposes?
  • Companies with international branches
  • Divisional registration
  • What are the consequences of VAT grouping?
  • Reclaiming overpaid VAT
  • More...

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

In August 2020, HMRC published a call for evidence on potential changes to the rules on VAT grouping, in particular the establishment provisions, making VAT grouping compulsory, and VAT grouping eligibility for limited partnerships and Scottish partnerships. In March 2021, the government announced that it had decided not to proceed with these changes. For more information on the original consultation, see News Analysis:

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