Blog

Group VAT and Making Tax Digital in Business Central: A UK Guide

Group VAT and Making Tax Digital in Business Central: what HMRC says about VAT groups and digital links, the VAT Group Management extension Microsoft documents, its limits, and what to check before your next return.

Lee Nash · · 3 min read
Group VAT and Making Tax Digital in Business Central: A UK Guide

If your UK group is registered for VAT as a single group, Making Tax Digital adds a specific question: how do figures from several companies reach one return, digitally? This guide sets out the rules and the options Business Central gives you.

Key Point iconKey PointA VAT group files one return, so every member's figures have to reach it through digital links.

What VAT group registration means

Section card: what VAT group registration means

HMRC's VAT Notice 700/2 sets out the rules. A group of eligible persons may apply to be treated as a single taxable person for VAT purposes.

  • The representative member completes and renders the single return on behalf of the group.
  • All members are jointly and severally liable for any VAT debts.
  • Supplies between group members are normally disregarded for VAT.

Under HMRC's VAT Notice 700/22, data that moves between programs must move through digital links. HMRC does not consider cut and paste or copy and paste to be a digital link.

For a group, that applies to every step that brings members' figures into the single return.

Watch Out iconWatch OutCopying figures from one system into another by hand is not a digital link under HMRC's rules.

What Business Central provides

Section card: VAT Group Management in Business Central

Microsoft documents a VAT Group Management extension for the United Kingdom:

  • members and the representative connect their Business Central tenants with an assisted setup;
  • members submit their VAT returns to the group representative rather than to HMRC;
  • the representative includes the members' latest submissions in one VAT return and submits it to HMRC.

Microsoft notes some limits. Members must be licensed Business Central users, and the settlement action posts member amounts separately with a Post Group VAT Settlement action.

Microsoft's Making Tax Digital page also says group VAT scenarios are not in scope of the built-in MTD feature, with no built-in way to retrieve VAT entries from companies in the group, and refers customers to partners. So check which route fits your group, especially if some members are not on Business Central.

Pro Tip iconPro TipMap every member's route into the group return, including any company that is not on Business Central.

What to check before your next return

Section card: what to check before your next group VAT return
  • Are every member's VAT figures held in digital records?
  • Does every step into the group return use a digital link, with no retyping?
  • Is the return submitted against the group VAT number, by the representative member?
  • Does it include every member for the period, including any that joined or left?
  • If a member uses other software, how does its data reach the group return digitally?

Next steps

Amplio is also building a UK Group VAT MTD Bridge extension. It is in development and not yet available; our apps page shows where it stands.

Our upgrade guide covers MTD in Business Central more generally, and our implementation guide covers VAT and posting set-up. For independent guidance, see the ICAEW technology resources, or talk to our team about your group's set-up.

Follow on LinkedIn