HMRC has approached the CIOT for its contribution to an informal consultation on VAT grouping. Following a formal consultation in 2016, HMRC is looking again at the expansion of VAT grouping following the CJEU decision in Larentia + Minerva and Marenave [2015] STC 2101.
Three options are proposed, limited to those that can be introduced without amending the current control test for grouping. HMRC has concerns around the potential for avoidance if amendments were made to the control test. These would allow:
a non-corporate entity (for example partnership or individual) to join a VAT group with its body corporate subsidiaries if it controls all of the members of the VAT group;
a partnership to join a VAT group where all of the partners in the partnership are bodies corporate and all of the bodies corporate are already in a VAT group; and
a limited partnership to join a VAT group where the sole general partner is a body corporate and manages the limited partnership.
HMRC has approached the CIOT for its contribution to an informal consultation on VAT grouping. Following a formal consultation in 2016, HMRC is looking again at the expansion of VAT grouping following the CJEU decision in Larentia + Minerva and Marenave [2015] STC 2101.
Three options are proposed, limited to those that can be introduced without amending the current control test for grouping. HMRC has concerns around the potential for avoidance if amendments were made to the control test. These would allow:
a non-corporate entity (for example partnership or individual) to join a VAT group with its body corporate subsidiaries if it controls all of the members of the VAT group;
a partnership to join a VAT group where all of the partners in the partnership are bodies corporate and all of the bodies corporate are already in a VAT group; and
a limited partnership to join a VAT group where the sole general partner is a body corporate and manages the limited partnership.
