VAT and holding companies

HMRC have recently released a Revenue & Customs Brief following  the Court of appeal case Briitish Airport Authority (BAA).  The case relates to whether a Holding Company can recover VAT it has incurred on expenditure specific to the acquisition of another business.


The Court of Appeal noted that there are 2 conditions for the recovery of VAT. “Firstly the tax must be incurred by a taxable person in the course of an economic activity. Secondly the goods and services on which the VAT is incurred must have a direct and immediate link with taxable supplies made by that person.”


The Court of Appeal dismissed the case because at the time of the purchase of the shares the purchaser was not making VATable supplies and the acquisition would not result in the Holding Company making future VATable supplies.


This case reiterates the ongoing problem that Holding Companies have with regards to VAT recovery, a Holding Company must be able to generate it’s own VATable supplies, for example by management charges, the supply of staff etc, before there is a possibility of recovering VAT on expenditure. In addition, if it is possible to link an acquisition of shares with future VATable supplies then there is the possibility of recovering some of the VAT incurred.

У нашей фирмы интересный блог на тематику резина киев цена
Нашел в интернете авторитетный сайт со статьями про Мастерон