Supreme Court Clarifies VAT Recovery Rules for Corporate Groups After Hotel La Tour Decision

The Supreme Court in HMRC v Hotel La Tour Ltd [2025] UKSC 46 ruled that VAT on professional fees related to a share sale is not recoverable.
The Court clarified that share sales are generally VAT exempt, and the purpose of raising finance does not override this exemption.
VAT deduction requires a “direct and immediate link” to VATable supplies, which was not present in this case.
The Court also clarified that VAT grouping does not change the VAT treatment of share sales or allow related professional fees to be attributed to other VATable activities.

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.