1. Tax groups – Guidance Note
1.1 Overview
1.1.1 Short brief
Tax grouping for VAT purposes is an administrative easement available to businesses and a revenue protection measure for government:
- Creating a tax group has the effect of registering a single taxable person.
- A tax group is issued one VAT Tax Registration Number (TRN) for use by all group members, and only one tax return is required for all group members.
- Transactions taking place within a tax group are generally disregarded for VAT purposes, meaning that cash-flow or absolute VAT costs that might otherwise be suffered by the businesses concerned are eliminated. Moreover, revenue risks that might otherwise arise on significant intra-group transactions are also eliminated.
Strict qualifying criteria must be applied to limit the use of the measure to those for which it is designed i.e. it is an administrative simplification measure, not one designed to enable tax avoidance at any level.
1.1.2 Purpose of this document
This document contains more detailed guidance for businesses interested in forming a tax group, adding members to or removing members from an existing tax group, and disbanding a tax group.
1.1.3 Who should read this document?
This document should be read by all persons seeking to understand whether or not they are eligible to form a tax group, how to amend a tax group, and how to disband a tax group. It should also be read by those who are part of a tax group so as to understand their associated obligations.
Download the complete Tax Groups VAT Guide VATGGR101 May 2018