What happens if a company joins a Tax Group in the middle of a tax period?
Usually, a company can’t join a Tax Group in the middle of a tax period. They should join at the start of a tax period to avoid the need for a partial-year tax return. However, if a new company is created and wants to join an existing Tax Group, it can do so from its date of incorporation.
If a brand new company wants to become part of an existing Tax Group, it can do so right from the day it’s officially established.
In this situation, there’s no need for the new company to file a tax return for just a part of the year. This is because either:
- The new company joins the Tax Group on its very first day of existence, so it has never been taxed separately before joining.
- The new company joins the Tax Group at the start of a tax year, so it already filed a complete tax return for the full 12 months outside of the Tax Group before joining.
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