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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: Landfill Tax (LT): Who is liable to pay the debt? Group and divisional registrations

Two or more companies can apply for LT group treatment. One of the companies registers for LT on behalf of the group and all the companies in the group account for LT via this representative member.

Group members are liable together and individually (jointly and severally) with the representative member for LT incurred by the representative member on behalf of the group. This liability extends to a particular company only to debts incurred at a time when the company was a member of the group: companies are liable for all debts incurred whilst they are members of the group even if they subsequently leave before such liabilities are paid or come to light.

Section 59 (1) of the Finance Act 1996, provides:

“Where under the following provisions of this section any bodies corporate are treated as members of a group, for the purposes of this part –

a) any liability of a member of the group to pay tax shall be taken to be a liability of the representative member

b) all members of the group shall be jointly and severally liable for any tax due from the representative member.”

As corporate bodies they may be wound up. Group members remain registered under the Companies Acts as incorporated companies and are individually liable for pre-group liabilities 9that is liabilities incurred before they join the group.

Divisional Registrations

Divisional registration allows independent units of large corporations to register for LT independently, rendering their own LT returns and paying tax due. However, the corporation is the legal entity that is ultimately responsible for paying tax due; application will be made to the corporation.