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HMRC internal manual

VAT Assessments and Error Correction

General assessment procedures: Assessments to VAT groups registrations

How HMRC treat groups of companies is covered by Section 43 of the VAT Act 1994.

VAT group treatment is an arrangement which allows two or more corporate bodies to account for VAT as a single taxable person.

The representative member of the group is registered for VAT and is responsible on behalf of all the other members, for accounting for VAT on the group’s activities.

Any assessment of VAT is made on, and notified to the current representative member of the group. All members of the VAT group, however, are jointly and severally liable for any tax due from the representative member, and former group members continue to be liable for any debts which arose during their period of membership.

Bear in mind that an assessment of tax in respect of a group registration is to include misdeclarations by those members who were part of the group during the relevant periods, even though they may no longer be part of the group.

The representative member is not responsible for accounting for VAT due on supplies made by members of the group before they joined the group.

Where a company joins a group and you subsequently find that there is VAT due from that member on supplies made before it joined the group, you must make your assessment against the individual company concerned using its previous VAT registration number.

This will normally mean notifying the assessment by letter as the normal VAT641 procedures will not be appropriate.

For guidance on a change in representative members, see VAEC6181.