VAT recovery on corporate transactions
Produced in partnership with Pinsent Masons
VAT recovery on corporate transactions

The following Tax practice note produced in partnership with Pinsent Masons provides comprehensive and up to date legal information covering:

  • VAT recovery on corporate transactions
  • Business acquisitions
  • Business sales
  • Share acquisitions
  • Is the acquiring company the recipient of the supply?
  • Is the acquiring company carrying on an economic activity?
  • Involvement in the management of subsidiaries
  • Management of subsidiaries and apportionment between economic and non-economic activities
  • Do the costs have a direct and immediate link to future taxable supplies?
  • Future taxable supplies that do not take place
  • More...

VAT is recoverable by a taxable person if it is attributable to taxable supplies made in the course or furtherance of a business. For an explanation of the rules on VAT recovery generally, see Practice Note: When can a person recover VAT?

VAT paid on professional fees (of accountants, lawyers and other advisers) incurred in corporate transactions may be recoverable depending upon the circumstances of the transaction.

This Practice Note contains references to judgments of the EU Court of Justice. For information on the ongoing significance of EU law in the UK following the end of the Brexit implementation period on 31 December 2020, see Practice Note: Brexit and tax—the continued application of EU law. Unless otherwise stated, all judgments of the Court of Justice referred to in this Practice Note were decided before the end of the Brexit implementation period.

Business acquisitions

The acquisition of a business will often be treated as a transfer of a going concern (TOGC) for VAT purposes. This means that if certain conditions are fulfilled, it will be treated as neither a supply of goods nor a supply of services.

For more information, see Practice Notes: VAT—what is a transfer of a business as a going concern? and VAT—consequences of a transfer of a going concern.

If the purchaser acquires assets by way of a TOGC and the assets are to be used

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