No right to backdate group membership

In June 2013 the taxpayer applied for its US parent company to join its VAT group with immediate effect. HMRC approved the inclusion.

In 2016 the taxpayer asked HMRC to amend the date on which its US parent became a group member to July 2012. This was on the basis that this was when the US parent acquired its UK permanent establishment and that it should have registered for VAT in the VAT group then.

If this retrospective back dating were allowed the effect would be that about £2m of VAT that had been accounted for under the reverse charge on services that had been supplied to the taxpayer by its US parent would become repayable by HMRC.

HMRC rejected the request to backdate VAT group registration and the First-tier Tribunal struck out the appeal. The taxpayer appealed to the Upper Tribunal.

The Upper Tribunal said the First-tier Tribunal had...