member (Paragraph 2(1), Schedule 28, FA 2000). These conditions have to be met at some time in the relevant period.
9.3 The relevant period is the period from 12 months before the start of the relevant accounting period to the date when the tax is payable (Paragraph 2(2), Schedule 28, FA 2000). Therefore, if the accounting period is for 12 months, the relevant period will be a total of 2 years, 9 months. 9.4 In what circumstances does the Seller require protection from the impact of this contingent liability? Clearly if the Company is non-resident then protection is needed in the form of an indemnity from the Buyer. In these circumstances, if the Buyer does not procure that the Company settles its tax liabilities falling due after Completion, the tax can be charged by HMRC to the Seller. The same applies if the Company owns a group or consortium interest in the non-resident company. 9.5 Whether the protection set out in 9.4 above is needed or not will depend on the peculiar circumstances of the Company at the time of Completion and this will clearly be known to the Seller. 9.6 There is a broader risk to the Seller, which extends beyond these peculiar circumstances: the Company may be liable to pay tax in respect of a non-resident company which is a member of the Buyer’s group. If the tax relates to transactions taking place before Completion, then the main covenant will make the Seller potentially liable. 9.7 Paragraph 6(2) includes the hallowed words that a company that has paid an amount in pursuance of a notice under this Schedule may recover that amount from the taxpayer company. 10 Section 43 and Sections 43A to 43D, Valued Added Tax Act 1994
10.1 Section 43, VATA 1994, provides for bodies corporate to be treated as members of a group, in which case any business carried on shall be treated as carried on by the representative member. All members of the group shall be liable jointly and severally for any VAT due from the representative member (Section 43(1), VATA 1994).
10.2 The alternative conditions set out in Section 43A, VATA 1994 for creating such a group are that:
10.2.1 one of the bodies corporate controls each of the others;
10.2.2 one person (whether a body corporate or an individual) or a business partnership controls all of them.
10.3 The existence of the joint and several liabilities can create problems with VAT if the Company is a member of a VAT group prior to Completion. It is very likely that the
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