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HMRC internal manual

VAT Groups

From
HM Revenue & Customs
Updated
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VAT avoidance - groups of companies statement of practice on the new Schedule 9A VATA 1994: records

It is not intended that these provisions should increase the record keeping requirements of taxpayers to enable either Customs to assess under, or taxpayers to comply with, these provisions. If neither the company de-grouped nor the remainder of the group have accurate records to determine the value and nature of transactions between them then an assessment will be made on the best judgement of Customs from all available records, either obtained from or made available to Customs, by the taxpayer.

Where a direction covers times after its issue the consequences of the direction will materially affect the treatment of any supplies from the date specified in the direction and such supplies will be subject to the normal accounting requirements for VAT. So, for example, a de-grouping direction could result in a separate registration being set up for the company concerned and it will have to make returns and pay tax accordingly.