Commentary

V7.170 Management services to a group member (being the only taxable supplies)

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.170 Management services to a group member (being the only taxable supplies)

Part V7 Tax planning | Commentary

V7.170 Management services to a group member (being the only taxable supplies)

There is no problem forming a group registration if the only taxable supplies relate to management services supplied by one group member to another. The initial thinking might be that this measure would be blocked because it will, in reality, generate nil VAT returns in most cases. See Example 5 to illustrate this point.

If one of the entities is making taxable supplies that would make it liable or eligible to register for VAT in its own right a VAT group can be formed, subject to the other conditions for VAT group registration being met. The group will, however, not be able to recover any input tax unless it makes taxable supplies outside the group, or makes supplies outside the UK that would be taxable

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