What has changed since BLP? Etienne Wong (Old Square Tax Chambers) reviews the recent Court of Appeal ruling on VAT deductibility for professional fees incurred on share sales.
The basic position is this: if a business charges VAT it can recover VAT; if it does not it cannot. That is an over-simplification of course. In more formal (but not that much more complicated) terms: VAT incurred on goods and services is recoverable but only ‘[i]n so far as the goods and services are used for the purposes of ... taxed transactions’ (PVD article 168). Taxed transactions are basically transactions that give rise to supplies on which VAT is chargeable (whether at 0% 5% or 20%).
Hotel La Tour [2024] EWCA Civ 564 is a case on the recoverability of VAT – specifically VAT incurred on a share sale.
A share sale is a transaction in shares...
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What has changed since BLP? Etienne Wong (Old Square Tax Chambers) reviews the recent Court of Appeal ruling on VAT deductibility for professional fees incurred on share sales.
The basic position is this: if a business charges VAT it can recover VAT; if it does not it cannot. That is an over-simplification of course. In more formal (but not that much more complicated) terms: VAT incurred on goods and services is recoverable but only ‘[i]n so far as the goods and services are used for the purposes of ... taxed transactions’ (PVD article 168). Taxed transactions are basically transactions that give rise to supplies on which VAT is chargeable (whether at 0% 5% or 20%).
Hotel La Tour [2024] EWCA Civ 564 is a case on the recoverability of VAT – specifically VAT incurred on a share sale.
A share sale is a transaction in shares...
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