Value Added Tax Act 1994 section 43C

Groups: termination of membership

Section 43C gives HMRC the power to terminate a person's membership of a VAT group, either to protect the revenue or where the member is no longer eligible for group treatment.

• HMRC may terminate a person's VAT group membership by issuing a notice specifying the termination date, which must be on or after the date the notice is given, and only where HMRC considers it necessary to protect the revenue.
• Where HMRC considers that a group member is not, or is no longer, eligible under section 43A to be treated as a member of the group, HMRC must issue a notice terminating that membership.
• In eligibility cases, the termination date in the notice may be backdated, but no earlier than the date on which HMRC considers the person first became ineligible or ceased to be eligible for group membership.
• The distinction matters in practice: a revenue protection removal takes effect only from the notice date onwards, whereas an eligibility-based removal can be applied retrospectively to the point when eligibility was actually lost.