VAT group meaning

This checklist presents core tax queries to raise with a joint venture counterparty. The goal is to identify the principal UK tax considerations that could arise for the remaining joint venture participant(s) and/or any joint venture vehicle, with those potential matters highlighted in the list. It is assumed that the parties are UK tax resident corporate entities and that any joint venture vehicle will also be UK tax resident. The following Practice Notes give further detail on the UK tax issues signposted in this checklist and highlighted in this checklist as follows: The tax consequences of contractual joint ventures The tax consequences of establishing a joint venture partnership The tax consequences of operating and terminating a joint venture partnership The tax consequences of establishing a joint venture company The tax consequences of operating and terminating a joint venture company The tax consequences of international joint ventures The transfer pricing and joint ventures The tax influences on choice of joint venture...

This checklist highlights matters a Scottish commercial lease tenant (assignor) in Scotland ought to review. It explains when the landlord’s consent to assignation is needed, whether the landlord must act reasonably in giving that consent, the form and content required for both consent and assignation, and the points both parties and the assignee should weigh up regarding the landlord’s letter of consent to assignation and the assignation legal instrument itself. An assignation passes to the assignee the tenant’s (assignor’s) interest in the lease from an agreed date until the lease comes to an end. It allows the assignee to occupy the premises on the same terms as the assignor; see: Nature of assignation: Stair's Laws of Scotland (Stair Memorial Encyclopaedia) [290]. A style letter of consent to assignation, and a style assignation, are available to view from the Property Standardisation Group (PSG): PSG Leases—Management Documentation. Must the assignation be in writing?...

How to use this Checklist This Checklist pinpoints common matters that arise when negotiating and drafting the following agreements: Trade mark assignment (pro-assignor) Trade mark assignment (pro-assignee) For more detail on the legal basis for assigning trade marks and the formalities required, see Practice Note: Assigning intellectual property rights. It can also be repurposed as heads of terms to capture headline agreed points while a formal trade mark assignment is being finalised. For guidance on this, see Precedent: Heads of terms—commercial contracts. Checklist schedule for proposed trade mark assignment Checklist, further details, notes (if any) Key commercial considerations ☐ Parties Verify which entities will be party to the agreement—specify the current owner of the trade marks (ie the assignor) and the entity to whom they will be transferred (ie the assignee). Also confirm each party’s legal status and whether any third parties (such as group affiliates) are intended to benefit under the proposed agreement. ☐...

The Prudential Assurance Company Ltd v HMRC [2024] EWCA Civ 300 The Prudential Assurance Company Ltd (Prudential) acted as the representative member of its VAT group. Another company in the group, Silverfleet Capital Ltd (SCL), executed an investment management services contract to provide services to Prudential. Under that contract, SCL was also eligible for a management fee and deferred performance fees once a specified hurdle rate was achieved. Under section 43 of the Value Added Tax Act 1994 (VATA 1994), no VAT was payable on the management fee because they were in the same VAT group. In 2007, SCL exited the VAT group. In 2014 and 2015, the triggers for paying the further deferred performance fee were satisfied and SCL invoiced Prudential for over £9m in total. The question before the Court of Appeal was whether those additional performance fees ultimately constituted consideration for a supply made while both companies were members of the same VAT group or, alternatively, whether the services amounted to a continuous supply of services...

Illuminate Skin Clinics Ltd v HMRC [2025] UKUT 341 (TCC) The appellant’s services were carried out by Dr Shotter, a registered medical practitioner acting for the appellant. It was common ground that a number of those supplies, including make-up and retail skincare products, also attracted the standard rate of VAT. The question was whether other services, for example procedures that reduce fat cells, fell within the exemption in item 1, Group 7, Schedule 9 to the Value Added Tax Act 1994 (VATA 1994)...

HMRC v Innovative Bites Ltd [2024] UKUT 95 (TCC) VATA 1994, Sch 8, Group 1 sets a zero rating for VAT on food, while identifying excepted items taxed at the standard rate. Excepted Item 2 states: ‘Confectionery, not including cakes or biscuits other than biscuits wholly or partly covered with chocolate or some product similar in taste and appearance.’ The central question for the UT in HMRC v Innovative Bites Ltd [2024] UKUT 95 (TCC) was whether the product came within Excepted Item 2, which required an assessment of how that provision interacts with Note 5 to the legislation. Note 5 provides that the term ‘confectionery’ in Excepted Item 2 ‘includes chocolates, sweets and biscuits; drained, glacé or crystallised fruits; and any item of sweetened prepared food which is normally eaten with the fingers’. This interpretive exercise framed the tribunal’s analysis in the appeal...

This Practice Note outlines when someone can become liable to a VAT-related penalty. A person charged with a VAT penalty may have a right of appeal; for guidance on appeal rules, see Practice Note: Appealing an HMRC decision. Civil penalties There are two broad types of civil penalties: those arising from failure to meet basic compliance obligations, and those stemming from more serious conduct or omissions This Practice Note highlights the principal penalties in each group; for a comprehensive list, consult the further reading link to De Voil Indirect Tax Service [V5.332]. Civil penalties are issued by HMRC through assessment; for general information on assessments, see Practice Note: VAT assessments. Penalties for basic compliance failures Penalties apply where a taxpayer does not meet core VAT compliance duties, including: breach of regulations made under VATA 1994. These regulations set out detailed collection and payment rules, so most administrative mistakes are covered. Failure to carry out specific obligations,...

Before disposing of a business or trade When planning a disposal, a corporate seller must choose the most suitable deal structure. Commercial drivers should lead, yet securing a tax-efficient outcome will inevitably be a key concern. The initial choice is whether to transfer: the business and its underlying assets (a business sale), or the shares in a subsidiary that holds the business and assets (a share sale) Broadly, sellers tend to prefer a share sale: it offers a straightforward exit and, where the substantial shareholdings exemption (SSE) applies, any gain is exempt from tax. An asset deal is more likely to crystallise tax charges and leaves any pre-completion tax liabilities with the seller. This Practice Note does not address individual sellers or business asset disposal relief (BADR). For more on BADR, see Practice Note: CGT—business asset disposal relief (formerly entrepreneurs' relief)...

FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: In 2027, stamp duty and SDRT are set to give way to a unified, self-assessed levy on securities—the securities transfer charge (STC)—to be paid and reported through a new digital portal. In broad terms, the STC’s design will align with the proposals for that tax set out in the 2023 consultation. Finance Bill 2026 (FB 2026) creates a power, commencing on Royal Assent, for secondary legislation that will enable taxpayers to pilot the digital service by self-assessing their stamp taxes on securities obligations and submitting transactions electronically via the service. This will allow reporting and payment to be handled online as part of the modernisation of stamp taxes on shares. For detailed coverage of the modernisation of stamp taxes on securities, see: News Analyses: Budget 2025—Tax analysis—Stamp and transfer taxes Tax update spring 2025—Stamp taxes on shares modernisation Tax update spring 2025—Tax analysis—Stamp and transfer taxes TAMD 2023—Stamp taxes on...

Introduction The Criminal Finances Act 2017 (CFA 2017), effective in the UK since 2017, establishes a corporate offence for failing to stop the criminal facilitation of tax evasion. Tax evasion means unlawfully not paying, or paying less than, the taxes due. It commonly occurs through non-declaration or false declaration of liabilities to the appropriate tax authority. Tax evasion is a criminal offence. Responsibility may arise for an individual, for example in respect of income tax or VAT, or for a corporate body, for instance regarding corporation tax. Enclosed, for your review and approval, is a [ n updated ] [ Group ] policy on preventing the facilitation of tax evasion. This policy, which covers all of our businesses, opens with a brief message from [ insert name of relevant individual ] underlining its significance and calling for the personal commitment of every member of staff to put it into practice. It has received formal approval from [ insert name of relevant individual and/or team ]...

1 Definitions and interpretation 1.1 In this Agreement, and except where the context dictates otherwise, the expressions below shall bear the meanings set out here: Relevant Proportion means, for the purpose of clause, the greatest share of the Company’s [ trading ] losses [ and other amounts eligible for relief from taxation ] that the law permits to be surrendered to the relevant Shareholder (or a member of its Shareholder Group), or, as applicable, the greatest share of the Company’s trading profits against which the Shareholder (or a member of its Shareholder Group) is permitted by law to surrender its [ trading ] losses [ and other amounts eligible for relief from taxation ] ; VAT means United Kingdom value added tax [ and any other tax imposed in substitution for it OR , any other tax imposed in substitution for it and any equivalent or similar tax imposed outside the United Kingdom ] ; 2 Tax matters 2.1 [ The...

subscription and shareholders’ agreement/investment agreement Insert new definitions: A Ordinary Shares; Board; Chair (per clause reference); Investor Consent/Investor Direction (written consent by the Lead Investor or holders of at least [75]% in nominal value of A Ordinary Shares); Investor Director; [Lead Investor]. Add a clause granting Investors the right at any time to appoint and remove non-executive Investor Director[s] and a non-executive Chair by written notice (first appointments effective on Completion), appoint alternates, disapply retirement by rotation, and secure fees of £[amount] p.a. plus VAT and expenses. Establish post‑Completion [remuneration and audit] committee[s] with casting vote rights. articles of association Add definitions for A and B Ordinary Shares, Preference Shares, Investor, Investor Group, Investor Associate, Investor Director, Investor Consent/Direction, Investor Director Interest, Group Company Interest, Co‑Investment Scheme, Confidential Information, FSMA, Fund, Lead Investor, Recognised Investment Exchange, Quotation and Sale. New articles set Board size; permit alternates; regulate meetings, quorum and remote participation; enable authorisation of conflicts and Investor Director/Group Company interests with disclosure and, if directed, A...