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HMRC internal manual

VAT Registration

Voluntary registration: miscellaneous: off the shelf companies

An ‘off the shelf company’ is one that is created by accountants or other agents and held as dormant for a time before onward ‘sale’ to sole proprietors and partnerships who wish to become corporate bodies. This is common in the field of consultancy and other services and is normally done for direct tax reasons. Sometimes these agents will seek to have the company VAT-registered while dormant. Such requests should be dealt with under the normal intending trader rules.

It is common for these companies to be created in bulk with names such as ABC 1 Ltd, ABC 2 Ltd, and so on. Agents then seek to make a bulk application for VAT registration providing one set of evidence of intention to cover all the companies on the grounds they will all be doing the same thing.

Under no circumstances should you accept such ‘bulk’ evidence: each company must be treated separately. VAT Act 1994, Schedule 1, paragraph 9 provides that it is the person wishing to register that must satisfy the Commissioners of their entitlement to register. In this context, the person applying is ABC 1 Ltd and so on, not the agent.