Holding companies ― overview

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

Holding companies ― overview

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
imgtext

VAT for holding companies is a complex and highly litigated area, particularly when it comes to the entitlement of holding companies to recover the VAT that they incur on costs. HMRC’s policy has developed over time but it still often takes an aggressive approach in denying holding companies VAT recovery on costs. Holding companies should exercise extreme caution when it comes to their VAT affairs and they should plan carefully and early (particularly in relation to acquisitions and disposals of shareholdings).

This guidance note provides an overview of some of the key VAT considerations for holding companies, specifically:

  1. •

    what is a holding company?

  2. •

    when can a holding company recover VAT on costs?

  3. •

    the effect of VAT grouping for holding companies

What is a holding company?

HMRC suggests that in simple terms, a holding company is a company that acquires and holds shares in one or more subsidiary companies. In reality, a range of different types of businesses may be referred to as ‘holding companies’. Some holding companies may be entirely ‘passive’

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+™

Popular Articles

Substantial shareholding exemption ― overview

Substantial shareholding exemption ― overviewThe substantial shareholdings exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. No claim is required. Provided

14 Jul 2020 13:44 | Produced by Tolley Read more Read more

Payments on account (POA)

Payments on account (POA)This guidance note provides and overview of the payments on account regime (POA). More in depth commentary can be found in De Voil Indirect Tax Service V5.110.What are payments on account?VAT registered businesses with an annual VAT liability of more than £2.3m are required

14 Jul 2020 12:52 | Produced by Tolley Read more Read more

Fuel-related payments / mileage payments

Fuel-related payments / mileage paymentsIntroductionMost employers will make payments to employees in relation to business travel. Among the most common payments in relation to business travel are fuel and mileage payments. If an employer does not reimburse these amounts, then the employee will be

14 Jul 2020 11:46 | Produced by Tolley in association with Philip Rutherford Read more Read more