Recovering VAT on Deal Fees: Day 2 Considerations

• 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.

---

---