A newly formed company, not currently VAT registered, is to join an existing VAT group. It is a wholly owned subsidiary of the representative member. The relevant forms were submitted to HMRC at the start of November 2021 which they lost but have now found. Per HMRC, there is a 6 month processing backlog. The application is still within the 90 day objection window. Newly formed company has significant input VAT which the group would like to claim.
I am assuming that Newco's VAT amounts can not be included within the current group return pending HMRC acceptance. But I thought I would ask whether there is any scope?
PS Apologies for the lack of a question mark in the title. I ran out of characters.
Replies (13)
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I'd claim. The group shouldn't be inconvenienced by Government admin failures.
It's not so long since 15 working days was quoted for new registrations and that was not required more often than not.
Equally, I ought to point out that if there was more output tax than input tax, I'd've included that too.
Naive question but, when you say "A newly formed company .. is to join an existing VAT group" - what determines the effective date of registration (when it is finally accepted by HMRC)?
So, given "relevant forms were submitted to HMRC at the start of November 2021 which they lost but have now found" ... presumably you're good to go?
Indeed, so my pragmatic (non-accountancy) approach would be to claim the input tax ... but ensure that clients knows this remains a repayable liability until HMRC have accepted/confirmed registration.
This is based on the practicality that it's nearly always easier to repay HMRC than to retrospectively claim money from them!
And, as TD would say, this is NOT advice - just thinking aloud.
Hmmm - that matches my thinking aloud as well. Will discuss risks with client and see what they want to do. (I know the anwer to that one).
Have a good weekend.
What's the risk, exactly? Why do you think the application will be rejected?