VAT Groups overcharged VAT

In a recent case, the Upper Tribunal held that the activities of a company within a VAT group to which a supply of a business had been transferred contributed directly to the economic activity of the group as a whole. The transfer of the business to the company in the VAT group qualified as the transfer of a business as a going concern (TOGC) and outside the scope of VAT. The businesses within the VAT group had not lost their individual identities despite them being in a VAT group where the supplies between them were ignored for VAT purposes. The transfer of the business to the VAT group was outside the scope of VAT.