Value Added Tax Act 1994

43 Groups of companies.U.K.

(1)Where under the following provisions of this section any bodies corporate are treated as members of a group, any business carried on by a member of the group shall be treated as carried on by the representative member, and—

(a)any supply of goods or services by a member of the group to another member of the group shall be disregarded; and

(b)any [F1supply which is a supply to which paragraph (a) above does not apply and is a supply] of goods or services by or to a member of the group shall be treated as a supply by or to the representative member; and

(c)any VAT paid or payable by a member of the group on the acquisition of goods from another member State or on the importation of goods from a place outside the member States shall be treated as paid or payable by the representative member and the goods shall be treated—

(i)in the case of goods acquired from another member State, for the purposes of section 73(7); and

(ii)in the case of goods imported from a place outside the member States, for those purposes and the purposes of section 38,

as acquired or, as the case may be, imported by the representative member;

and all members of the group shall be liable jointly and severally for any VAT due from the representative member.

[F2(1A)Paragraph (a) of subsection (1) above shall not apply in relation to any supply of goods or services by one member of a group to another unless both the body making the supply and the body supplied continue to be members of that group until—

(a)in the case of a supply of goods which are to be removed in pursuance of the supply, a time after the removal;

(b)in the case of any other supply of goods, a time after the goods have been made available, in pursuance of the supply, to the body supplied; or

(c)in the case of a supply of services, a time after the services have been performed.]

(2)An order under section 5(5) or (6) may make provision for securing that any goods or services which, if all the members of the group were one person, would fall to be treated under that section as supplied to and by that person, are treated as supplied to and by the representative member.

(3)Two or more bodies corporate are eligible to be treated as members of a group if each is resident or has an established place of business in the United Kingdom and—

(a)one of them controls each of the others; or

(b)one person (whether a body corporate or an individual) controls all of them; or

(c)two or more individuals carrying on a business in partnership control all of them.

(4)Where an application to that effect is made to the Commissioners with respect to two or more bodies corporate eligible to be treated as members of a group, then, from the beginning of a prescribed accounting period they shall be so treated, and one of them shall be the representative member, unless the Commissioners refuse the application; but they shall not refuse it unless it appears to them necessary to do so for the protection of the revenue.

(5)Where any bodies corporate are treated as members of a group and an application to that effect is made to the Commissioners, then, from the beginning of a prescribed accounting period—

(a)a further body eligible to be so treated shall be included among the bodies so treated; or

(b)a body corporate shall be excluded from the bodies so treated; or

(c)another member of the group shall be substituted as the representative member; or

(d)the bodies corporate shall no longer be treated as members of a group,

[F3unless the Commissioners refuse the application under subsection (5A) below.].

[F4(5A)If it appears to the Commissioners necessary to do so for the protection of the revenue, they may—

(a)refuse any application made to the effect mentioned in paragraph (a) or (c) of subsection (5) above; or

(b)refuse any application made to the effect mentioned in paragraph (b) or (d) of that subsection in a case that does not appear to them to fall within subsection (6) below.]

(6)Where a body corporate is treated as a member of a group as being controlled by any person and it appears to the Commissioners that it has ceased to be so controlled, they shall, by notice given to that person, terminate that treatment from such date as may be specified in the notice.

(7)An application under this section with respect to any bodies corporate must be made by one of those bodies or by the person controlling them and must be made not less than 90 days before the date from which it is to take effect, or at such later time as the Commissioners may allow.

(8)For the purposes of this section a body corporate shall be taken to control another body corporate if it is empowered by statute to control that body’s activities or if it is that body’s holding company within the meaning of section 736 of the M1Companies Act 1985; and an individual or individuals shall be taken to control a body corporate if he or they, were he or they a company, would be that body’s holding company within the meaning of that Act.