HMRC can be suspicious of an application to disband a group (i.e. de-group) because tax avoiders have tried to exploit the ‘disregard’ provisions, which apply to supplies between group members. Sometimes the sole or main purpose of grouping and then de-grouping is to avoid VAT.

In order to combat such avoidance, HMRC’s have the power to refuse an application to leave a group.

Even where a member is no longer eligible to be a member of the group, they have some discretion around the date of exit from the group.

Application to de-group

An application to de-group a company can be made on Form VAT 51,

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