Commentary

V7.468 Charities—group registration

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.468 Charities—group registration

Part V7 Tax planning | Commentary

V7.468 Charities—group registration

Example 7 illustrates a useful planning point about group registration.

Example 7

Good Causes Ltd is a registered charity and owns a trading subsidiary called Good Causes Trading Ltd. Neither company is registered for VAT because their main supplies are either outside the scope of VAT or exempt from VAT. However, Good Causes Ltd incurs costs on behalf of Good Causes Trading Ltd, and wants to make a management charge of £100,000 per annum for these services.

The problem with the above situation is that Good Causes Ltd will need to charge output tax on the management services once it

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