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HMRC internal manual

VAT Groups

Applications for VAT group treatment: treatment of retrospective applications

Section 43B(4) states; we may allow an application from a date prior to the date received. Our policy is that applications to form a new VAT group or to change the composition of an existing one may be given retrospective effect but only for a period which does not:

  • exceed thirty days before the date on which the application is received by HMRC, and
  • span the beginning of the current VAT return period of an existing VAT group, or
  • span the beginning of the current VAT return period of any of the companies applying to form, join or leave the VAT group.

For example, companies “A”, “B” and “C” apply to form a new VAT group. We receive this application is on 1 July 20xx. The earliest that the application can be given effect is 1 June 20xx (30 days prior to receipt). However, company “A’s” current VAT return period began on 1 May 20xx, company “B’s” current VAT return period began on 1 June 20xx and company “C” is on non-standard tax periods and its current VAT return period began on 15 June 20xx. Under these circumstances, the application to form a new group would only be given retrospective effect from 15 June 20xx.

The reason for this policy is to avoid the need to amend or replace VAT returns for periods which have already finished.

If the retrospective application relates to unauthorised VAT group treatment different criteria will apply. (Please see VGROUPS02550 for more detail).