VAT repayments following changes in group membership

There have been two conflicting tribunal decisions on the right to recover overpaid VAT in circumstances where a company either later joined or left a VAT group. In Standard Chartered, the tribunal held that a right to repayment arising in respect of supplies made before the existence of a VAT group essentially remains with the taxable entity concerned and that a representative member will not inherit a VAT reclaim. However, the fact that a group member may leave a group would not affect the representative member’s right to recover an overpayment of VAT during the existence of the VAT group. In MG Rover Group, the tribunal reached the opposite view, considering that the VAT group fiction should not outlive the membership of the ‘real world supplier’ in the group