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:

  1.  

    •     it is registered in the names of divisions

  2.  

    •     it was so registered throughout the one-year period by reference to which the duty to make payments on account arises, and

  3.  

    •     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:

  1.  

    •     the amounts which he is required to pay

  2.  

    •     how those amounts have been calculated, and

  3.  

    •     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

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