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VAT group registration applications

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The CIOT has published HMRC guidance on how businesses should account for VAT while waiting for HMRC to approve (or otherwise) their VAT grouping applications.

The guidance states that, while the VAT grouping application is in process, VAT-registered single entities and/or the existing VAT group must file their VAT returns as they become due. These returns should be calculated correctly as if the application was not happening. Sales and purchases should be included on the relevant VAT return and any supplies between the group and single entity must be treated as normal sales and purchases.

Failure to submit VAT returns or pay a VAT bill on time or submitting inaccurate return figures will result in default surcharges and/or civil penalties.

If there is a delay in HMRC processing the application, additional steps may be required so the entity can join the group from the date requested. For example, there may be a need to cancel an earlier VAT return and make a repayment to HMRC if the date of joining the VAT group overlaps with a submitted VAT return. In such scenarios, HMRC will explain what steps must be taken.

The guidance also includes an example on VAT grouping application.

Issue: 1560
Categories: News