Key takeaways
- A VAT group lets two or more eligible businesses under common control register for VAT under one number, with one representative member filing one VAT return.
- Supplies between members of a VAT group are generally disregarded for VAT, so no VAT is charged and no VAT invoices are needed.
- Every member is jointly and severally liable for the group's VAT debts, and former members stay liable for VAT due while they were in the group.
- You set up, add members to, remove members from or disband a VAT group using form VAT50/51, and change the representative member using form VAT56.
- Since 1 November 2019, individuals and partnerships that control the UK companies in a group can join it, under section 43A of the VAT Act 1994.
- A group registration normally starts on the date HMRC receives the application, and backdating is normally limited to 30 days.
- HMRC's guidance updated on 29 October 2026 warns that joining or leaving a VAT group can make your EORI number invalid.
- Members should tell HMRC within 30 days if they stop meeting the eligibility conditions.
A VAT group treats two or more businesses under common control as one taxable person, with one VAT number and one VAT return. You set one up, add or remove members, or disband it on HMRC’s form VAT50/51, and change the lead company on form VAT56. HMRC updated its guidance on 29 October 2026 to warn that any change in membership can affect your EORI number.
What is a VAT group?
A VAT group is a single VAT registration covering several businesses. One business, the representative member, holds the registration, submits the group’s VAT return and pays or receives the VAT for everyone. HMRC’s VAT Notice 700/2, last updated on 22 July 2026, sets out the rules.
The main benefit is that supplies between members are generally disregarded. Management charges, intra-group rent and shared services then carry no VAT, which matters most where some members make exempt supplies and cannot recover all their input tax. The trade-off is joint and several liability: every member can be pursued for the whole group’s VAT debt.
| Feature | VAT group | Separate registrations |
|---|---|---|
| VAT returns | One for the group | One per business |
| VAT on supplies between members | Generally disregarded | Charged as normal |
| Liability for VAT debts | Joint and several | Each business alone |
Who can join a VAT group?
Each member must be established, or have a fixed establishment, in the UK, and the members must be under common control. Under section 43A of the VAT Act 1994, UK companies are eligible if:
- one of them controls each of the others
- one person, whether a company or an individual, controls all of them
- two or more individuals in partnership control all of them
Since 1 November 2019, individuals, partnerships and Scottish partnerships can also be members themselves, if they carry on a business, are established in the UK and control the UK companies in the group. Control normally follows the holding company test in section 1159 of the Companies Act 2006. A business can belong to only one VAT group at a time.
How to set up a VAT group
- Check eligibility for each member. Confirm common control and UK establishment, using section 2 of Notice 700/2.
- Choose the representative member. It must be a group member and will sign the application and run the group’s VAT returns.
- Gather the details. For each member, HMRC asks for incorporation status, number and date, any VAT number, expected taxable and non-taxable turnover including supplies to other members, and whether it meets the control conditions.
- Complete form VAT50/51. Use the online form; you cannot save progress, so prepare everything first. Print it and post it to the address shown on the form.
- Add form VAT53 if an agent applies. This authorises an accountant or agent to form or amend the group.
- Wait for HMRC’s response. HMRC confirms receipt within 40 working days and has 90 days from a complete application to make enquiries.
The group normally takes effect from the date HMRC receives the application, or a later date you choose. Backdating is normally limited to 30 days before receipt, and only to the start of the current VAT period. Members’ existing VAT numbers are cancelled and replaced by the group number.
How to amend a VAT group
You use form VAT50/51 again to add members, remove members or disband the group. HMRC’s amend a VAT group guidance asks you to give, for each member joining or leaving:
- incorporation details and expected turnover
- its exemption status
- any capital assets under the Capital Goods Scheme
- payments for supplies falling due after the change
- for leavers, whether it has applied for its own VAT number, and why it is leaving
Since 28 July 2026 the guidance says the form must be submitted by someone authorised and registered with Companies House, such as a director or company secretary. An employee, accountant or agent must also send form VAT53. Insolvency practitioners cannot use the online service and must post the form.
Changes take effect from the date HMRC receives them. To change the representative member, use form VAT56; if the new representative is not already a member, add it on VAT50/51 first.
How to leave a VAT group or disband it
A member leaves by being removed on VAT50/51, and the whole group ends by asking HMRC to disband it on the same form. A leaving business must then decide whether it needs its own VAT registration based on its turnover; see VAT registration.
Members must tell HMRC within 30 days if they stop meeting the eligibility conditions, for example after a sale of shares. HMRC can also refuse an application, or remove members, to protect the revenue or counter avoidance.
What changed on 29 October 2026?
HMRC added a warning that VAT group changes can affect EORI numbers and customs work. In summary:
- If you join a group, apply for a new EORI number once the group registration is active.
- If you leave a group, the group’s EORI number may no longer be valid for you. Cancel it and apply for a new one if you still import or export.
- If you get a new EORI number, check any customs authorisations, licences or approvals linked to the old number.
What to do now
Check whether any planned restructure, share sale or acquisition will change who is in your VAT group, and diary the 30-day notification limit. If the group imports or exports, plan EORI changes before the effective date. Non-UK members reclaiming UK VAT should note HMRC’s separate change for non-UK businesses in a VAT group. For partial exemption issues in a group, see VAT partial exemption, and for groups of companies and tax losses, group relief.
Frequently asked questions
What form do I need to set up a VAT group?
Form VAT50/51, completed online, printed and posted to HMRC. An agent applying for you also needs form VAT53.
Can a sole trader or partnership join a VAT group?
Yes, since 1 November 2019, if the individual or partnership controls the UK companies in the group, carries on a business and is established in the UK.
Who pays the VAT in a VAT group?
The representative member files the single VAT return and pays the VAT, but every member is jointly and severally liable for the group’s VAT debts.
Can a VAT group registration be backdated?
Normally by up to 30 days before HMRC receives the application, and only to the start of the current VAT period. Earlier dates need exceptional circumstances.
Do I need a new EORI number after joining or leaving a VAT group?
Usually yes. HMRC’s guidance from 29 October 2026 says to apply for a new EORI once the group registration is active, and that a leaver may need to cancel the group’s EORI.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 6 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.