Part 2Value added tax

20Groups

1

After section 43A of the Value Added Tax Act 1994 (c. 23) (groups: eligibility) insert—

43AAPower to alter eligibility for grouping

1

The Treasury may by order provide for section 43A to have effect with specified modifications in relation to a specified class of person.

2

An order under subsection (1) may, in particular—

a

make provision by reference to generally accepted accounting practice;

b

define generally accepted accounting practice for that purpose by reference to a specified document or instrument (and may provide for the reference to be read as including a reference to any later document or instrument that amends or replaces the first);

c

adopt any statutory or other definition of generally accepted accounting practice (with or without modification);

d

make provision by reference to what would be required or permitted by generally accepted accounting practice if accounts, or accounts of a specified kind, were prepared for a person.

3

An order under subsection (1) may also, in particular, make provision by reference to—

a

the nature of a person;

b

past or intended future activities of a person;

c

the relationship between a number of persons;

d

the effect of including a person within a group or of excluding a person from a group.

4

An order under subsection (1) may—

a

make provision which applies generally or only in specified circumstances;

b

make different provision for different circumstances;

c

include supplementary, incidental, consequential or transitional provision.

2

After section 43C of that Act insert—

43DGroups: duplication

1

A body corporate may not be treated as a member of more than one group at a time.

2

A body which is a member of one group is not eligible by virtue of section 43A to be treated as a member of another group.

3

If—

a

an application under section 43B(1) would have effect from a time in accordance with section 43B(4), but

b

at that time one or more of the bodies specified in the application is a member of a group (other than that to which the application relates),

the application shall have effect from that time, but with the exclusion of the body or bodies mentioned in paragraph (b).

4

If—

a

an application under section 43B(2)(a) would have effect from a time in accordance with section 43B(4), but

b

at that time the body specified in the application is a member of a group (other than that to which the application relates),

the application shall have no effect.

5

Where a body is a subject of two or more applications under section 43B(1) or (2)(a) that have not been granted or refused, the applications shall have no effect.

3

In section 43(1) of that Act (effect of treatment as group) for “sections 43A to 43C” substitute “ sections 43A to 43D ”.

4

In section 43B(1), (2)(a), (5)(a) and (5)(b) and section 43C(3)(b) of that Act (groups: applications for membership and termination of membership) for “under section 43A(1)” substitute “ by virtue of section 43A ”.

5

In section 97(4) of that Act (orders, &c.: affirmative resolution) after paragraph (c) insert—

ca

an order under section 43AA(1) if as a result of the order any bodies would cease to be eligible to be treated as members of a group;