The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the issues that need to be considered by a business who is either considering forming a VAT group or has recently formed one. This note should be read in conjunction with the VAT group registration and VAT groups ― specified bodies and protection of the revenue guidance notes.
Once a VAT group has been formed, all supplies are deemed to be made to and by the representative member of the group. All correspondence with HMRC should be made by the representative member of the group. This was confirmed in the Kingfisher decision.
Any supplies made between members of the same VAT group will be disregarded for VAT purposes so no VAT needs to be accounted for on these supplies. No VAT invoices should be issued for any supplies between members of the same VAT group.
However, in certain circumstances, HMRC can direct the group to account for VAT on a specific transaction under its anti-avoidance provisions. Please see the VAT groups ― specified bodies and protection of the revenue guidance note for more information.
The representative member is not responsible for accounting for any VAT due on supplies made by a member before it became a member of the VAT group.
The members of the VAT group are jointly and severally liable for the debts of the group and if the representative member is unable to pay the taxes due, HMRC will seek to collect the debt from other members of the group. See VGROUPS01500. Please see the TOGCs and VAT groups guidance note for more information.
Whilst group registration creates joint and several liability for VAT purposes, it does not impose commercial agreements or indemnities.
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