In The Prudential Assurance Company Ltd v HMRC TC/2018/07480 the FTT ruled that a VAT group member (other than the representative member) does not make supplies in the course of a business.
The taxpayer (P) was the representative member of a VAT group. A member of that group (S) provided investment fund management services to P. One element (the performance fee) of S’s fees for these services was dependent on the funds achieving certain performance targets and consequently was not invoiced or paid until those targets had been met.
During the period in which S provided its services it was a member of P’s VAT group and did not charge VAT on its services. However by the time the performance fee was triggered it had as the FTT put it ‘emerged blinking into the sunlight of the ‘real’ world from the dark subterrains of...
