VAT groups ― main consequences

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • VAT groups ― main consequences
  • What are the main consequences of VAT grouping?
  • What are the key advantages of VAT grouping?
  • What are the key disadvantages of VAT grouping?
  • Practical points ― VAT grouping main consequences

VAT groups ― main consequences

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note considers the main consequences that follow when a group of persons come together to form a VAT group. It also considers the key advantages and disadvantages which flow from these consequences.

For an overview of VAT grouping an divisional registration generally, see the VAT group and divisional registration ― overview guidance note.

For in-depth commentary on the legislation and case law in this area, see De Voil Indirect Tax Service V2.189Z and V2.190.

What are the main consequences of VAT grouping?

There are a wide variety of consequential and related implications when a decision is made to form a VAT group. However, the main implications are broadly as follows:

  1. the group is registered in the name of a single ‘representative member’ (which is chosen from the persons included within the group)

  2. the representative member is responsible for completing VAT returns and paying and reclaiming VAT on behalf of the other m

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