VAT groups in the UK can only currently consist of corporate entities. However, from 1 November 2019, they can also contain partnerships and sole proprietors.
Strict criteria have to be met, and HM Revenue and Customs can refuse an application or unwind an existing VAT group “for the protection of the revenue”; but where a non-corporate entity is able to be part of an existing VAT group, or create one with corporate entity/ies the option should be evaluated.
There are pros and cons to VAT group treatment which should be fully explored but VAT grouping can produce savings in time, administration, cash flow and VAT if the circumstances are right.
If you have any further questions please contact our VAT Director, Ian Marrow.