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Group VAT registration

Advantages and disadvantages of VAT grouping.

At Numera we can advise companies in the London area about group VAT registration. Here are some of the issues to consider.

VAT grouping occurs where two or more companies or limited liability partnerships (LLPs) are treated as a single taxable “person” for VAT purposes. A VAT group is treated in the same way as a single company registered for VAT on its own.

An unincorporated body, such as a sole trader or partnership, is also permitted to join a VAT group provided it makes taxable supplies and controls one or more companies or LLPs.

In general, the members of the group each have to have an establishment in the UK and be under common control. There are special conditions for VAT groups with an annual turnover of more than £10 million.

Advantages of group registration are:

  • The representative member accounts for any tax due on supplies made by the group to third parties outside the group. This can be helpful where accounting is centralised.
  • The group is treated as a single taxable person and therefore it is not normally necessary to account for VAT on goods or services supplied between group members.
  • There is one single VAT return for the whole group.

Disadvantages are:

  • Although the representative member is nominally liable for transactions with third parties, all group members are jointly and severally liable for debts, including the tax due.
  • Limits for areas such as cash accounting, annual accounting, voluntary disclosure, partial exemption de minimis and payments on account apply to the group as a whole and not the members individually.
  • A new VAT registration number will be required for the group.

As with most other areas of the tax system, VAT Groups are subject to detailed anti-avoidance provisions.

If you’re based in the London area and would like further advice on VAT group registration, please contact Numera.

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Company details

020 7794 5757

Numera, 4th Floor Charles House, 108-110 Finchley Road, London NW3 5JJ

Numera is a trading name of Numera Partners LLP | Company Registration No. OC365787 | Place of Registration: England & Wales | Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales.

About us

Numera is a newly established forward-thinking firm of chartered accountants, with over 25 years in experience of audit, accountancy, taxation and business advisory services.

We work with clients in a large variety of industries and sectors; from sole traders to multi-million pound turnover organisations. We aim to create and maintain a close relationship with our clients. By being so involved, we are able to identify opportunities for our clients as well as possible risks that our clients may be faced with.

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