V5.110 VAT payments on account
An order1 made under VATA 1994, s 28(1), (2), (4), (5) sets out the circumstances in which a taxable person is under a duty to make payments on account of any tax for a prescribed accounting period. The duty to make payments on account applies to any bodies corporate treated as members of a group as if those bodies were one taxable person, and is the responsibility of the representative member2.
A body corporate is not under a duty to make payments on account if:
• it is registered in the names of divisions
• it was so registered throughout the one-year period by reference to which the duty to make payments on account arises, and
• the divisions so registered are the same divisions
However, it is under a duty to make payments on account by reference to the total amount of tax of its individual divisions3; that is, each division is regarded as a separate business for the purpose of the scheme4.
Regulations made under VATA 1994, s 28(3), (4), (5) provide that HMRC must notify the following information to a taxable person (or, in the case of a corporate body, a division thereof) who is required to make payments on account5:
• the amounts which he is required to pay
• how those amounts have been calculated, and
• the times for payment of those amounts
Persons required to make VAT payments on account
A person is under a duty to make payments on account