CSE3540 | How the conditions are to be interpreted: Number of members and memberships: What happens if a member of the CSG ceases to receive “qualifying supplies”?

If an existing member ceases to receive qualifying supplies for any period of 12 months following their membership of a CSG then HMRC will presume that an intention to receive such supplies has ceased and, therefore, the member will cease to be eligible for membership of a CSG going forward. However, if the member can show that the intention to receive ‘qualifying supplies’ in the near future still exists then membership of the CSG can continue.

If a member ceases to be eligible for membership of the CSG there have to be at least two remaining eligible members for the CSG itself to continue to be a CSG falling within the terms of Group 16 of Schedule 9 to the VAT Act 1994 and to continue to be able to make exempt supplies going forward.