- Recovery of VAT on deal fees is a common question in deals
- HMRC challenges the recovery of VAT on deal fees
- Bidco needs to have an “economic activity” to recover VAT on costs
- Conditions must be satisfied for holding company to deduct VAT on costs
- Holding company must make taxable supplies or loans to recover VAT
- Management Services Agreement should be drafted before completion
- Holdco must be the recipient of the supply to recover VAT
- Holdco must be VAT registered to get VAT back from HMRC
- Following through on details outlined above is crucial for VAT recovery.
Source: claritastax.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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