Autumn Budget 2018 – VAT groups

Supplies between members of a VAT group are disregarded for VAT purposes, which can be a great advantage on many levels.

Under current UK rules, only corporates are eligible to join a VAT group.

In addition, the current UK rules are currently unwieldy where there are overseas branches of a company within a UK VAT group.

Changes  to the VAT group rules were  reported by Gabelle in the Autumn Statement 2016: http://www.gabelletax.com/blog/2016/11/23/autumn-statement-2016-changes-to-vat-groups/

We are inching closer to a resolution of some of the issues which cause difficulties for VAT groups.  Finance Bill 2018-19 will introduce legislation to extend the eligibility to join a VAT group to certain non-corporate entities.

In addition, revised VAT grouping guidance will be issued to amend the definition of ‘bought in services’ to ensure that such services are subject to UK VAT and to clarify HMRC’s treatment of UK fixed establishments.

Clarity is also promised on HMRC’s powers for the protection of the revenue and it will be interesting to see the detail when it is published.