VAT group registration applications

The Chartered Institute of Taxation has received guidance from HMRC on how businesses should account for VAT while waiting for HMRC to deal with their VAT grouping applications.

This states that VAT registered single entities or the existing VAT group must file their VAT returns as they become due. Sales and purchases should be included on the VAT return and any supplies between the group and single entity treated as normal sales and purchases.

HMRC confirms that failure to submit VAT returns pay the VAT bill on time or submit inaccurate return figures will result in default surcharges and/or civil penalties.

If there is a delay in HMRC processing the application further steps may be required so the entity can join the group from the date requested. For example there may be a need to cancel an earlier VAT return and make a repayment to...