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11. Group VAT Registration (a)
Two or more companies can register as a group for VAT purposes. They must be under
common control of a third company and resident in the UK.
(b)
The group is treated for VAT purposes as if it were a single company registered for VAT on its
own.
(c)
A representative member of the group is appointed and this company is responsible for
completing and submitting a single VAT return and paying the VAT on behalf of the group.
(d)
All companies in the VAT group are jointly and severally liable for any VAT liabilities of the
group.
(e)
The advantages of group VAT registration are:
‣
No VAT is accounted for on transactions between group members within the VAT group
‣
Only one VAT return is submitted for the group; therefore an administrative advantage.
‣
The group can choose which companies to include or exclude. It would be beneficial to
exclude a company making zero rated sales as it would then be able to continue making
monthly returns to get the improved cash flow of monthly VAT repayments.
(f)
The disadvantages of group VAT registration are:
‣
The limits for Cash and Annual Accounting schemes will apply to the group as a whole
and not on an individual company basis.
‣
Joint and several liability of each company in the group.
‣
Possible administration issues collecting information to be passed on to the
representative member.
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June 2023 to March 2024 exams Watch free ACCA TX lectures
