Since the introduction of VAT, two or more UK corporate bodies, if they were eligible, have had the option of registering together as a group for VAT purposes.

This was considered an administrative facilitation measure and recognised that groups of related businesses often functioned as a single trading entity. It provided the means for all their VAT accounting to be included on a single VAT return with supplies between group members disregarded.

For many businesses, particularly those not able to recover all the input tax they incur, this provides planning opportunities.