Ask an expert: Problems with VAT groups when many become one

Question

A group of companies under the same control can form a single VAT group in the UK. A large US banking client has: (1) a branch of a US parent in the VAT group unto which recharges are being made; (2) various Fleming claims in relation to acquisition of companies which accounted for VAT in previous VAT registrations; and (3) their UK VAT group has merged a business it purchased as a transfer of a going concern – but HMRC says VAT is due. Is that right?

Answer

A number of cases have hit the headlines recently concerning VAT groups concerning the above issues.

Branch in a VAT group receiving charges from the US parent company