HM Customs & Excise (Customs) has put forward proposals to modify the criteria for value-added tax (VAT) grouping membership, to conform to the accounting consolidation rules rather than existing company law grouping rules. This is likely to affect many joint ventures (JVs), where VAT grouping is currently available but may be denied under the new rules. Customs considers that the current rules are too far removed from economic reality, and believes this situation is being abused. The changes, which are planned to take effect from mid-2004 without any transitional relief are subject to consultation. Corresponding changes are planned for limited partnerships.
February 01 2004