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HMRC internal manual

VAT Registration

Joint working in the construction industry - how to establish if a seperate registration is needed

Stage Action Outcome
Stage 1 Do the businesses have a joint venture agreement? If ‘No’ then go to stage 6
    If ‘Yes’ then go to stage 2
Stage 2 Do the terms of the joint venture agreement create a partnership? If ‘No’ then the joint venture is not a new entity, so it cannot register for VAT.  Go to stage 6 to determine whether the beneficial owner(s) should be registered
    If ‘Yes’ then go to stage 3
Stage 3 Is the partnership making taxable supplies? If ‘No’ then the partnership is not liable to register for VAT Go to stage 4
    If ‘Yes’ then the partnership must register separately if the taxable supplies exceed the registration threshold Go to Stage 5
Stage 4 Do the parties hold purchase invoices issued in the name of the partnership or joint venture? If ‘No’ each partner will deduct input tax in the usual way
    If ‘Yes’ the invoices must set out clearly how much input tax each partner can recover
Stage 5 Have purchase invoices been issued in the name of the partnership or joint venture? If ‘No’ they cannot be used as evidence for deduction of input tax. A solution to this would be to ask the suppliers to amend the customer name on their sales invoice
    If ‘Yes’ the partnership can claim the VAT on these invoices as input tax
Stage 6 Will the sales or rental income be taxable? If ‘No’ then no new VAT Registration will be needed
    If ‘Yes’ then go to stage 7
Stage 7 Is legal and beneficial interest in the land held by the same person(s)? If ‘No’ then go to stage 8
    If ‘Yes’ then go to stage 9
Stage 8 If legal title is held by one or more trustees, is the benefit of the sales, rental income, or both enjoyed by another person, i.e. the beneficial owner(s)? If ‘No’ then either; There is a single trustee who receives the benefits from the proceeds of the land, and who makes supplies above the registration threshold. This trustee will be required to register for VAT in respect of those supplies Where there is more than one trustee making taxable supplies above the registration threshold they are required to register jointly. They cannot use their individual existing VAT registration numbers to account for VAT on the supplies they make jointly. We will usually register the joint trustees as a partnership
    If ‘Yes’ then go to stage 9
Stage 9 Is there a single beneficial owner making supplies above the registration threshold? If ‘No’ where there is more than one beneficial owner and they are jointly making supplies above the registration threshold, then the beneficial owners are required to register in their joint names. They cannot use their existing registration to account for the supplies they make jointly. We will usually register the joint beneficial owners as a partnership
    If ‘Yes’ they will be required to register in respect of those supplies if they are not already registered