Finance Act 2019

Section 53

SCHEDULE 18 VAT groups: eligibility

PART 1 Eligibility of individuals and partnerships

1 (1) Section 43A of VATA 1994 (groups: eligibility) is amended as follows.

(2) In subsection (1), in the opening words—

(a) for “bodies corporate” substitute “UK bodies corporate”;

(b) omit “each is established or has a fixed establishment in the United Kingdom and”.

(3) Omit subsections (2) and (3).

(4) At the end insert—

“(4) An individual carrying on a business and one or more UK bodies corporate are eligible to be treated as members of a group if the individual—

(a) controls the UK body corporate or all of the UK bodies corporate, and

(b) is established, or has a fixed establishment, in the United Kingdom in relation to the business.

(5) Two or more relevant persons carrying on a business in partnership (“the partnership”) and one or more UK bodies corporate are eligible to be treated as members of a group if the partnership—

(a) controls the UK body corporate or all of the UK bodies corporate, and

(b) is established, or has a fixed establishment, in the United Kingdom in relation to the business.

(6) In this section—

(a) “UK body corporate” means a body corporate which is established or has a fixed establishment in the United Kingdom;

(b) “relevant person” means an individual, a body corporate or a Scottish partnership.

(7) Section 43AZA contains provision for determining for the purposes of this section whether a body corporate, individual or partnership controls a UK body corporate.”

2 In that Act, after section 43A insert—

“43AZA Section 43A: control test

(1) This section applies for the purposes of section 43A (and expressions used in this section have the same meaning as in that section).

(2) A body corporate (“X”) controls a UK body corporate if—

(a) X is empowered by statute to control the UK body corporate’s activities, or

(b) X is the UK body corporate’s holding company.

(3) An individual (“Y”) controls a UK body corporate if Y would, were Y a company, be the UK body corporate’s holding company.

(4) Two or more relevant persons carrying on a business in partnership (“the partnership”) control a UK body corporate if the partnership would, were it a company, be the UK body corporate’s holding company.

(5) In this section “holding company” has the meaning given by section 1159 of, and Schedule 6 to, the Companies Act 2006.”

PART 2 Consequential amendments

VATA 1994

3 VATA 1994 is amended as follows.

4 In section 18A (fiscal warehousing), in subsection (9), for “body corporate which” substitute “person who”.

5 (1) Section 43 (groups of companies) is amended in accordance with this paragraph.

(2) In subsection (1), for “bodies corporate” substitute “persons”.

(3) In subsection (1AA)—

(a) in paragraph (c)(ii), for “body which” substitute “person who”;

(b) in the closing words, for “body” substitute “person”.

6 In section 43AA (power to alter eligibility for grouping), in subsection (1), for “section 43A” substitute “sections 43A and 43AZA”.

7 (1) Section 43B (groups: applications) is amended in accordance with this paragraph.

(2) In subsection (1), for “bodies corporate, which” substitute “persons, who”.

(3) In subsection (2)—

(a) in the opening words, for “bodies corporate” substitute “persons”;

(b) in paragraph (a), for “body corporate, which” substitute “person, who”;

(c) in paragraph (b), for “body corporate” substitute “person”;

(d) in paragraph (d), for “bodies corporate” substitute “persons”;

(4) In subsection (3)—

(a) in the opening words, for “bodies corporate” substitute “persons”;

(b) in paragraph (b), for “bodies” substitute “persons”;

(5) In subsection (5)—

(a) in paragraph (a), for “bodies corporate” substitute “persons”;

(b) in paragraph (b), for “body corporate” substitute “person”.

8 (1) Section 43C (groups: termination of membership) is amended in accordance with this paragraph.

(2) In subsection (1), for “body corporate” substitute “person”.

(3) In subsection (3)(a) and (b) and in the closing words, for “body” substitute “person”.

(4) In subsection (4)(a) and (b), for “body” substitute “person”.

9 (1) Section 43D (groups: duplication) is amended in accordance with this paragraph.

(2) In subsection (1), for “body corporate” substitute “person”.

(3) In subsection (2), for “body which” substitute “person who”.

(4) In subsection (3)—

(a) in paragraph (b), for “bodies” substitute “persons”;

(b) in the closing words, for “body or bodies” substitute “person or persons”.

(5) In subsection (4)(b), for “body” substitute “person”.

(6) In subsection (5), for “body” substitute “person”.

10 In section 44 (supplies to groups), in subsection (1)(a) and (b), for “body corporate” substitute “person”.

11 In section 53 (tour operators), in subsection (2)(d), for “body corporate” substitute “person”.

12 In section 97 (orders, rules and regulations), in subsection (4)(ca), for “bodies” substitute “persons”.

13 (1) Schedule 9 (exemptions) is amended in accordance with this paragraph.

(2) In Group 14, in Note (13)—

(a) in the opening words, for “body corporate” substitute “person”;

(b) in paragraph (a) for “body” substitute “person”;

(c) in paragraph (b)—

(i) for “body corporate, or of any other body corporate which”, substitute “person, or of any other person who”;

(ii) for “body, at a time when that body” substitute “person, at a time when that person”.

(d) in paragraph (c), for “body corporate” substitute “person”.

(3) In that Group, in Note (14), for “body corporate’s” substitute “person’s”.

14 (1) Schedule 9A (anti-avoidance provisions: groups) is amended in accordance with this paragraph.

(2) In paragraph 1(2), for “body corporate” substitute “person”.

(3) In paragraph 2—

(a) in sub-paragraph (1)(a), for “body corporate” substitute “person”;

(b) in sub-paragraph (2), for “body corporate’s” substitute “person’s”.

(4) In paragraph 3—

(a) in sub-paragraph (1)(a) and (b), for “body corporate” substitute “person”;

(b) in sub-paragraph (3), for “body corporate” (in both places) substitute “person”;

(c) in sub-paragraph (5), for “body corporate which” substitute “person who”.

(5) In paragraph 5—

(a) in sub-paragraph (1)(b)—

(i) for “body corporate which” substitute “person who”;

(ii) for “that person” substitute “the person mentioned in paragraph (a)”;

(b) in sub-paragraph (2)—

(i) for “body corporate (“the relevant body”)” substitute “person (“the relevant person”)”;

(ii) for “that body or to any body corporate which” substitute “that person or to any person who”;

(iii) for “the relevant body” substitute “the relevant person”.

(6) In paragraph 6—

(a) in sub-paragraph (7)(b), for “body corporate that” substitute “person who”;

(b) in sub-paragraph (11)(b)—

(i) for “body corporate which” substitute “person who”;

(ii) for “that person” substitute “the person mentioned in paragraph (a)”;

(c) in sub-paragraph (11)(c), for “body corporate which” substitute “person who”.

15 (1) Schedule 10 (buildings and land) is amended in accordance with this paragraph.

(2) In paragraph 3—

(a) in sub-paragraph (1), for “body corporate” substitute “person”;

(b) in sub-paragraph (2)—

(i) in the opening words (in both places) and paragraph (c), for “body corporate” substitute “person”;

(ii) in paragraph (c), for “that body” substitute “that person”;

(c) in sub-paragraph (3), for “body corporate” substitute “person (“P”)”;

(d) in sub-paragraph (4)—

(i) in the opening words, for “The body corporate” substitute “P”;

(ii) in paragraphs (a), (aa), (b) and (c), for “the body corporate” substitute “P”;

(e) in sub-paragraph (5)—

(i) in the opening words, for “The body corporate” substitute “P” and for “the body corporate” substitute “P”;

(ii) in the closing words, for “the body corporate” substitute “P”.

(3) In paragraph 4—

(a) in sub-paragraph (1), for “body corporate which” substitute “person (“P”) who”;

(b) in sub-paragraph (2), for “the body corporate, it” substitute “P, P”;

(c) in sub-paragraph (3)(b), for “the body corporate” substitute “P”;

(d) in sub-paragraph (3)(c)—

(i) for “the body corporate” substitute “P”;

(ii) for “it” substitute “P”;

(e) in sub-paragraph (4)(b)—

(i) for “the body corporate” substitute “P”;

(ii) for “it” substitute “P”;

(f) in sub-paragraph (5), in the opening words—

(i) for “the body corporate” substitute “P”;

(ii) for “it” substitute “P”;

(g) in sub-paragraph (6)(a)—

(i) for “the body corporate” substitute “P”;

(ii) for “its” substitute “P’s”;

(h) in sub-paragraph (6)(b), for “the body corporate” substitute “P”;

(i) in sub-paragraph (7), for “the body corporate” substitute “P”.

(4) In paragraph 21—

(a) in sub-paragraph (1)(b)—

(i) for “body corporate” substitute “person”;

(ii) for “the body” substitute “the person”;

(b) in sub-paragraph (3)(a), for “body corporate which” substitute “person who”;

(c) in sub-paragraph (9)(b), for “body corporate which” substitute “person who”;

(d) in sub-paragraph (11)(b), for “body corporate which” substitute “person who”;

(e) in sub-paragraph (12), in the definition of “relevant group member”—

(i) after “any person” insert “(“P”)”;

(ii) for “body corporate which” substitute “person who”;

(iii) for “that person” substitute “P”.

(5) In paragraph 35(3), for “body corporate” substitute “person”.