Anti-Avoidance Rules: What is the definition of an associated business?
Regulation 55A(2) of VAT Regulations 1995 excludes any business that is associated with another person, whether or not that person is a corporate body or a natural person and irrespective of the taxable status of the person.
The regulation defines association as any case where:
- the business of one is under the dominant influence of the other or
- the persons are closely bound to one another by financial, economic and organisational links.
FRS6300 explains how ‘dominant influence’ and ‘organisational links’ are to be interpreted.