VAT groups ― related considerations and anti-avoidance

Produced by Tolley

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

  • VAT groups ― related considerations and anti-avoidance
  • How does VAT grouping affect partial exemption?
  • How does VAT grouping affect the capital goods scheme?
  • How can VAT grouping impact a TOGC?
  • How is VAT grouping affected by insolvency?
  • How does VAT grouping affect holding companies?
  • How does VAT grouping affect international groups?
  • When do anti-avoidance rules apply to supplies by overseas members?
  • When is the intra-group supply not disregarded?
  • How to calculate the reverse charge?
  • More...

VAT groups ― related considerations and anti-avoidance

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 provides an overview of several important issues associated with VAT grouping, including an anti-avoidance reverse charge for services bought in from overseas VAT group members and HMRC’s ‘protection of the revenue’ powers.

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

How does VAT grouping affect partial exemption?

As a VAT group is broadly treated as a single person for VAT purposes, the VAT group will be partly exempt if any of the members incur input tax that relates to the provision of exempt supplies. For details of partial exemption, see the Partial exemption ― overview guidance note. This also means that the partial exemption de minimis limits apply on a VAT group-wide basis (and not to individual members).

How does VAT grouping affect the capital goods scheme?

For details of the implications of VAT grouping on the capital goods scheme, see the Capital goods scheme ― transfers, disposals and VAT groups guidance note.

How can VAT grouping impact a TOGC?

VAT consequences can follow when trade and assets are transferred as a TOGC:

  1. between members of a VAT group

  2. outside a VAT group

  3. into a VAT group (special rules apply to certain transfers into pa

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