- UK historically operated a “whole entity” approach to VAT grouping
- UK treats whole overseas entity as part of UK VAT group if UK fixed establishment
- UK decided to maintain “whole entity” approach after 2020 consultation
- HMRC attacked arrangements in Barclays Service Corporation v HMRC
- HMRC argued BSC did not have UK fixed establishment, rules should be consistent with Danske Bank, and HMRC could deny VAT grouping for revenue protection
- HMRC successful in showing BSC did not have sufficient resources for fixed establishment
- FTT rejected HMRC’s arguments on consistency with Danske Bank and revenue protection
- VAT grouping rules intended for businesses to be taxed as single entity, HMRC not entitled to deny grouping for normal VAT consequences.
Source: simmons-simmons.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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