BB/30D/03 VAT—partial exemption; input tax incurred on a stock exchange listing; change of treatment
Business Brief, Issue 30. 24 December 2003
This Business Brief concerns VAT deduction on the costs of a Stock Exchange listing. It announces a change in policy following the VAT and Duties Tribunal decisions in the cases of Actinic plc (Decision No 18044) and Halladale Group plc (Decision No 18218) (Part V12).
An issue of shares for consideration to a UK-based shareholder is an exempt supply and VAT on related costs is exempt input tax. Exempt input tax cannot be deducted unless it falls within the partial exemption de minimis rules.
An issue of shares to an overseas shareholder is outside of the scope of UK VAT. However, where the shareholder is based outside of the EU, the related VAT can be deducted under the rules laid down in reg 103(2) of the VAT Regulations 1995.
A Stock Exchange listing that takes place without an issue of shares is not a supply for VAT purposes and related costs are treated as general overheads of the business. VAT on overhead costs is