- Overview of VAT Grouping Structures: HMRC has issued guidance regarding the formation of VAT groups that include state-regulated care providers and non-state-regulated welfare service providers, emphasizing that these structures are often used to recover VAT on exempt welfare services.
- HMRC’s Stance on Tax Avoidance: HMRC considers the use of these VAT grouping structures as a form of tax avoidance and plans to refuse new VAT group registration applications designed to facilitate such arrangements, while also reviewing existing groups for compliance.
- Action and Compliance Requirements: Organizations using VAT grouping structures are encouraged to assess their VAT accounting practices and seek professional advice, as HMRC will investigate suspected avoidance schemes and may take action, including removal from VAT groups, if necessary.
Source gov.uk
