Are ‘branches’ separate legal entities?

Les Howard
VAT Consultant
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When are branches of an organisation separate legal entities for VAT purposes?

This case creates no real precedent but builds on previous case law. It is worth a read to see how the Tribunal reviewed the documentation and day-to-day practices in reaching its decision. It is relevant to a range of organisations which have branches or sub-committees, etc.

Whether the Head Office and its branches are separate legal entities (as the taxpayer argued), or a single legal entity (as HMRC argued) turned on the facts. On consideration, there were factors that supported each argument. The Tribunal had to weigh those, in order to reach its decision. The various submissions in this case run from para 86. Its approach is explained in para 101:

In the light of the case law I think the most appropriate approach to adopt in this case is to consider first whether the branches are “persons” within the Interpretation Act definition on the basis that they are unincorporated associations, and then to consider whether they meet the test of economic independence.

In this case, the Tribunal concluded that the branches were in fact separate legal entities. (The decision was reached as a matter of principle, leaving the taxpayer and HMRC to resolve aby question of VAT due.)

About Les Howard


Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire

I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.


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