New Eligibility Criteria for VAT Groups

Date Published: November 12, 2019

Category: HMRC News, MTD for VAT, Making Tax Digital

From November 1st 2019, the eligibility criteria for VAT grouping will be extended to allow individuals, partnerships and Scottish partnerships to group with UK corporate bodies subject to certain conditions. Prior to this change, only corporate bodies – such as Limited companies or LLPs – were permitted to form a VAT group.

New Eligibility Criteria for VAT Groups

The change of rules ensures that HMRC meet EU laws by allowing unincorporated businesses to join a VAT group, if certain conditions are met. The main two conditions are:

  • The unincorporated business must be entitled to register for VAT as a standalone business. It must be making, or intending to make, taxable supplies. This is unlike corporate groups where a dormant entity can be included.
  • The unincorporated business must control all of the corporate bodies in the group.

The change in rules allows unincorporated businesses to benefit from Group VAT registration. Supplies of goods and services between group members are not subject to VAT, and each period will only require a single VAT Return for the group – rather than each group member submitting its own VAT Return.

How can we help?

Under MTD for VAT rules, VAT registered businesses with a taxable turnover above the VAT threshold (currently £85,000) are required to keep their VAT business records digitally, and send returns using software like BTCHub to maintain the digital link. MTD for VAT aims to recover some of the £9 billion HMRC loses each year to avoidable errors.

BTCHub’s new Group VAT feature is designed to make MTD compliance simple. Build up your consolidated figures for your group VAT return within BTCHub from multiple files, including exports from legacy sales and bookkeeping systems, and easily submit the VAT return to HMRC from BTCHub. To find out more about BTCHub and Group VAT, click here.

Talk to us!

If you’d like to discuss BTCHub with one of our friendly consultants, please get in touch on 0345 241 5030 or email sales@btcsoftware.co.uk

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