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;”.