Due to substantial delays in processing VAT group applications, HMRC have published a Brief containing interim guidance detailing how affected businesses should account for VAT while waiting for the applications to be approved.

Previously, business subject to these delays were required to take an increasingly significant amount of corrective action, both with respect to individual VAT returns due in the interim and the VAT treatment of supplies between group members on confirmation of registration.

However, to ensure that applicants are not too adversely affected, HMRC have confirmed that whilst awaiting a response businesses can treat the application as provisionally accepted from the date of submission and therefore account for VAT accordingly. This applies to any submitted application seeking to form a new VAT group, in addition to those amending/cancelling an existing group.

In the event businesses receive an automated assessment letter whilst awaiting a response, no action is required, and these will be cancelled automatically once the application has been resolved.

If you or your client are in the process establishing a new VAT group, or amending an existing group, and require advice, either in relation to the process itself or how to treat VAT while this is ongoing, please call our free VAT helpline for guidance today.

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