VAT Group - recovery of input tax

Input tax recovery possible if group member not making taxable supplies?

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I'm dealing with a group with a number of wholly-owned subsidiaries that form a VAT group.  

One of the intermediate holding companies bears many shared costs without recharging them across the trading entities. It makes no taxable supplies itself.  Does that mean it is potentially barred from recovering input tax suffered?

There are no obvious complicating factors such as non-UK companies, partial exemption.

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chips_at_mattersey
By Les Howard
25th Feb 2021 19:15

A VAT Group is treated as a single taxable person for VAT purposes. You should therefore look at the supplies made by the Group, not between Group members, to answer the question about input tax deductibility.
Is the Group itself fully taxable or partially exempt?

Thanks (1)
Psycho
By Wilson Philips
25th Feb 2021 20:07

It’s one of the recognised benefits of VAT -grouping - allowing recovery of input VAT that could not be claimed by a singleton company.

As Les says, subject to the VAT status of the group’s external supplies.

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By paul.benny
26th Feb 2021 07:07

Thanks. All external supplies are fully taxable, so sounds like my concerns are baseless.

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