VAT registration ― artificial separation of business activities (disaggregation)

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note should be read in conjunction with the VAT registration ― compulsory guidance note and is relevant to persons established or resident in the UK. Persons that are not established or resident in the UK cannot benefit from the UK VAT registration threshold. This guidance note:

•
explains what is meant by artificial separation of business activities
•
explains what is meant by closely bound by financial, economic and organisational links
•
explains what is meant by a Notice of Direction and the implications of a Notice being issued
•
provides practical points to consider

For detailed commentary please refer to De Voil Indirect Tax Service V2.190C and V2.223.

What is artificial separation of business activities?

Artificial separation of business activities occurs when taxable business activities are artificially separated between two or more persons that are bound to one another by financial, economic, and organisational links. HMRC has statutory powers to challenge such arrangements and issue a Notice of Direction that the persons named in the

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Owner-Managed Businesses

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more

Corporation Tax

FRS 102 ― tax presentation and disclosures

FRS 102 ― tax presentation and disclosuresPresentation of tax under FRS 102An entity must present changes in a current tax liability (or asset) and changes in a deferred tax liability (or asset) as a tax expense (or income) unless the item creating the current or deferred tax amount is recognised in

14 Jul 2020 11:46 | Produced by Tolley in association with Malcolm Greenbaum Read more

Corporation Tax

Terminal trading loss relief

Terminal trading loss reliefTerminal loss relief for trade losses in the final 12 monthsTrading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period.

14 Jul 2020 13:49 | Produced by Tolley Read more

��Ƶ