VAT Groups – Making tax digital

A number of our clients that operate VAT groups have been enquiring whether Sage 50 will be able to manage the submission of group VAT under Making Tax Digital (MTD). You will be pleased to know that it can via the MTD submission module.  You will of course need to download the required add-on. The process is straight forward and detailed instructions can be found on Sage.co.uk official website.

What is Group VAT

Two or more companies or limited liability partnerships - can register as a single taxable person or VAT group if:

• each body has its principal or registered office in the UK

• they are under common control - for example, one or more company is a subsidiary of a parent company

If the turnover of the VAT group is over £10 million per year and the group is partly owned or managed by a third party, you can only register as a group for VAT if:

• no more than 50% of benefits generated by the business go to third parties

• your group uses consolidated accounting

• no third party consolidates your group into its accounts

A VAT group is treated in the same way as a single taxable person registered for VAT on its own. The registration is made in the name of the ‘representative member’, who is responsible for completing and submitting a single VAT Return and making VAT payments or receiving VAT refunds on behalf of the group. All the members of the group remain jointly and severally liable for any VAT debts.To register you must complete forms VAT50 and VAT51.Wisteria act for many family run and owner managed companies. Given the impending switch to MTD do not delay.  Get in contact. If you have any questions or queries about this article please call us on 020 8429 9245 or email me at [email protected].