ÀÏ˾»úÎçÒ¹¸£Àû

How does VAT grouping impact a holding company’s entitlement to recover VAT?

Subject to meeting the conditions outlined in the VAT groups ― conditions guidance note, a holding company may join a VAT group. Even holding companies which do not have any trading (business) activities or which make only exempt supplies may be entitled to VAT group with their subsidiaries.

However, HMRC will not accept that joining a VAT group on its own will automatically give rise to an entitlement to VAT recovery.

HMRC has indicated that VAT grouping cannot change a non-economic activity into an economic activity (for the VAT status of activities, see the Holding companies ― VAT status of activities guidance note). This