Commentary

BB/3/04 VAT—consultation document “Tackling VAT group abuses”—further information

Part V16 Forms and other HMRC material

BB/3/04 VAT—consultation document “Tackling VAT group abuses”—further information

BB/3/04 VAT—consultation document “Tackling VAT group abuses”—further information

Business Brief, Issue 3. 29 January 2004

Business Brief 30/03 announced publication of this consultation document and invited comments by 1 March 2004 on proposed new legislative criteria for VAT grouping. Early feedback on the consultation document has highlighted two issues on which respondents have sought further information. To assist with the ongoing consultation process this Business Brief provides further background on these issues.

VAT groups controlled by overseas parent

Some respondents have asked if the proposals may prevent VAT grouping where UK companies are currently VAT grouped by reference to control by an overseas parent. This is not the intention. As at present, it will be possible to look for a controlling body at any level within the corporate group. Where there is a single UK holding company, the test can be applied by reference to that company's group accounts. Where there is no single UK controlling body, then the test can be applied by reference to the overseas parent's group accounts.

As discussed in the consultation document, if the UK holding company or overseas parent does not prepare group accounts, or does not prepare them to UK or International accounting

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