The CIOT has responded to the Treasury consultation on VAT grouping. Key points include:
The CIOT supports the ‘whole establishment’ provisions as opposed to ‘establishment’ provisions (EP). Although in principle the EP could bring some simplification by having a single reverse charge rule for all businesses, this would be outweighed by the additional costs, increased bureaucracy and uncertainty for businesses.
The CIOT does not currently support the change to compulsory grouping and would prefer that identified avoidance is targeted by changes to legislation to capture the small number of businesses that are deliberately using the VAT group rules to engage in VAT avoidance.
The CIOT urges caution around the introduction of beneficial ownership tests in the context of limited partnership and Scottish limited partnership structures, with particular concern being raised for fund management and private equity sectors.
The CIOT would like to see a future call for evidence considering the admission to a VAT group of other types of legal entities eg trusts, joint ventures and section 33 bodies, although the joint and several liability position would have to be considered concurrently.
The CIOT has responded to the Treasury consultation on VAT grouping. Key points include:
The CIOT supports the ‘whole establishment’ provisions as opposed to ‘establishment’ provisions (EP). Although in principle the EP could bring some simplification by having a single reverse charge rule for all businesses, this would be outweighed by the additional costs, increased bureaucracy and uncertainty for businesses.
The CIOT does not currently support the change to compulsory grouping and would prefer that identified avoidance is targeted by changes to legislation to capture the small number of businesses that are deliberately using the VAT group rules to engage in VAT avoidance.
The CIOT urges caution around the introduction of beneficial ownership tests in the context of limited partnership and Scottish limited partnership structures, with particular concern being raised for fund management and private equity sectors.
The CIOT would like to see a future call for evidence considering the admission to a VAT group of other types of legal entities eg trusts, joint ventures and section 33 bodies, although the joint and several liability position would have to be considered concurrently.
