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HMRC internal manual

Debt Management and Banking Manual

Enforcement action: transfers to Enforcement and Insolvency Services (EIS): send insolvency warning letter: groups

VAT groups
LBS groups

VAT groups


In the case of a VAT group the representative member and each of the solvent subsidiary members of the group will be jointly and severally liable for the whole of the VAT debt. But each company will only be liable for its own direct tax debt.

The names and addresses for the representative member and the solvent subsidiary members must be correctly spelt and match the registration details and Companies House records.

Care must be taken to check the direct tax liability for each company so as to maintain customer confidentiality. Remember to write to each member of the group separately. This is because EIS will serve each with a seven-day demand letter for the debt that they owe.

Creating the letters on SEES

Where prompted, add:

  • for the representative member, the names of the solvent subsidiary members or
  • for the solvent subsidiary members, the name of the representative member and the other solvent subsidiary members
  • the VAT debt only (including penalties and interest)
  • the whole debt for that particular company (in other words, direct tax + VAT debt + EEC debt due to HMRC, including penalties and interest).

Where to send the letters

Send each company a separate warning letter addressed to the Principal Place of Business (PPOB) (in other words, the main place where the business is carried on) and the Companies House registered office. If the PPOB and the Companies House registered office address are the same, send only one letter to that address.

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LBS groups

For LBS groups, LBU must use IWL90.