Paragraph 1

Section 43A of VATA 1994 (groups: eligibility) is amended as follows.

In subsection (1), in the opening words—

Omit subsections (2) and (3).

At the end insert—

“(4)

An individual carrying on a business and one or more UK bodies corporate are eligible to be treated as members of a group if the individual—

(a)

controls the UK body corporate or all of the UK bodies corporate, and

(b)

is established, or has a fixed establishment, in the United Kingdom in relation to the business.

(5)

Two or more relevant persons carrying on a business in partnership (“the partnership”) and one or more UK bodies corporate are eligible to be treated as members of a group if the partnership—

(a)

controls the UK body corporate or all of the UK bodies corporate, and

(b)

is established, or has a fixed establishment, in the United Kingdom in relation to the business.

(6)

In this section—

(a)

“UK body corporate” means a body corporate which is established or has a fixed establishment in the United Kingdom;

(b)

“relevant person” means an individual, a body corporate or a Scottish partnership.

(7)

Section 43AZA contains provision for determining for the purposes of this section whether a body corporate, individual or partnership controls a UK body corporate.”