VAT grouping rules have been changed following a European Court of Justice judgment
Revenue and Customs Brief 2 (2015): VAT grouping rules and the Skandia judgment explains HMRC’s current position following the decision of the European Court of Justice judgment.
It states that the brief should be read by ‘UK VAT-registered traders who are members of a VAT group in the UK or another EU member state, and have establishments (branches or head offices) in other member states.’
HMRC highlights that the VAT changes must be applied to services performed on or after 1 January 2016.
It notes that the ‘implication of the Skandia judgment is that an overseas establishment of a UK-established entity is part of a separate taxable person if the overseas establishment is VAT-grouped in a member state that operates similar “establishment only” grouping provisions to Sweden.
This will be the case whether or not the entity in the UK is part of a UK VAT group.’
The result is that businesses ‘must treat intra-entity services provided to or by such establishments as supplies made to or by another taxable person and account for VAT accordingly’.
You can find the brief in the 'Related links' section on this page.
VAT information sheet 01/15: claims by non-profit making members’ sports clubs for overpaid VAT on supplies of sporting services made to non-members provides guidance for members' clubs on repayment claims following the European Court decision on the long-running case of Bridport and West Dorset Golf Club.
In the guidance, HMRC now ‘accepts that supplies of sporting services made to both members and non-members by non-profit making members’ sports clubs can be treated as exempt from VAT’.
HMRC also points out that it introduced legislation on 1 January 2015 to reflect this change in policy. It highlights that the ‘information sheet should be read by any non-profit making members’ golf or sports club which has already made a claim for overpaid VAT to HMRC; or any such club which is now considering making a claim.’
The information sheet highlights the limits on claims and what HMRC expects from claimants.