VAT registration ― artificial separation of business activities (disaggregation)

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note should be read in conjunction with the VAT registration ― compulsory guidance note and is relevant to persons established or resident in the UK. Persons that are not established or resident in the UK cannot benefit from the UK VAT registration threshold. This guidance note:

•
explains what is meant by artificial separation of business activities
•
explains what is meant by closely bound by financial, economic and organisational links
•
explains what is meant by a Notice of Direction and the implications of a Notice being issued
•
provides practical points to consider

For detailed commentary please refer to De Voil Indirect Tax Service V2.190C and V2.223.

What is artificial separation of business activities?

Artificial separation of business activities occurs when taxable business activities are artificially separated between two or more persons that are bound to one another by financial, economic, and organisational links. HMRC has statutory powers to challenge such arrangements and issue a Notice of Direction that the persons named in

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Personal Tax

Married couple’s allowance

Married couple’s allowanceThe married couple’s allowance (MCA) is only available if one of the two spouses or civil partners was born before 6 April 1935. This means that one member of the couple must be at least 89 years old on 5 April 2024 to qualify for an allowance in the 2023/24 tax year.There

14 Jul 2020 12:13 | Produced by Tolley Read more

Value Added Tax

Supplies of goods and services connected with education

Supplies of goods and services connected with educationThis guidance note provides an overview of the VAT treatment of goods and services provided in connection with supplies of education. This should be read in conjunction with the following guidance notes:•Supplies of education•Local authority

14 Jul 2020 13:44 | Produced by Tolley Read more

Classes of NIC and who pays them

Classes of NIC and who pays themClass 1 NICClass 1 NIC is payable on earnings paid to an employed worker which derive from, or are treated as deriving from, an employed earner’s employment in the UK. There are two kinds of Class 1 NIC, primary contributions for which the employee is liable and

VAT registration ― artificial separation of business activities (disaggregation)

VAT registration ― artificial separation of business activities (disaggregation)