VPOA5000 | Payments on account by divisional and group registrations

Divisional registrations

A corporate body that is organised in divisions and carries on its business in divisions may apply to register each of those divisions separately (divisional registration). Each division receives a separate VAT registration number.

The separate registration of the divisions does not make them into separate taxable persons. It is the corporate body as a whole that remains the person legally responsible for the VAT debts and obligations of all the divisions.

However, for POA purposes, the Order provides for the £2.3 million test (see VPOA2000) to apply to each division and each division is responsible for making its own payments.

This is covered by Article 16 of the POA Order.

Group registrations

VAT group treatment allows two or more corporate bodies to account for VAT under a single registration number, with one of the corporate bodies in the group acting as the representative member.

The group is registered in the name of that representative member, who is responsible, on behalf of all of the other members of the group, for completing VAT returns and paying and reclaiming VAT.

For POA purposes, therefore, the £2.3 million test applies to the group as a whole and the representative member is responsible for making payments on behalf of the group.

This is covered by Article 17 of the POA Order.