VAT group registration change

Non-corporate entities can now join a VAT group if they meet certain conditions. The change was introduced from 1 November 2019 by The Finance Act 2019, Schedule 18 (VAT Groups: Eligibility) (Appointed Day) Regulations 2019, SI 2019/1348, which implemented the Sch 18, Finance Act 2019 amendments to s 43A, VATA 1994.

The VAT group registration control requirements have been expanded to allow certain non-corporate entities, such as individuals and partnerships, that have a business establishment in the UK and control a body corporate to be included in VAT group registrations. This follows a judgment from the Court of Justice of the European Union in Larentia + Minerva and Marenave (Cases C-108/14 and C-109/14).

An individual carrying on a business and one or more UK bodies corporate are eligible to be treated as members of a group if the individual controls the UK body corporate or all of the UK bodies corporate and is established, or has a fixed establishment, in the United Kingdom in relation to the business.

Two or more relevant persons carrying on a business in partnership and one or more UK bodies corporate are eligible to be treated as members of a group if the partnership controls the UK body corporate or all of the UK bodies corporate and is established, or has a fixed establishment, in the United Kingdom in relation to the business.

We note that HMRC guidance has not yet been issued in relation to the new rules and expect that VAT Notice 700/2 will be updated soon.

Anonymous