- The recent Hotel La Tour case at the UK’s First Tier Tribunal (FTT) may provide opportunities for businesses to reclaim VAT incurred on professional costs in relation to the disposal of shares in companies.
- Historically, HMRC’s policy was to deny the recovery of VAT incurred on costs relating to a share sale except in limited instances where the buyer was established outside the UK.
- However, the decision by the Upper Tier Tribunal in the Hotel La Tour case changes this and sets binding legal precedent.
- Businesses should assess whether there are opportunities to revisit the treatment they have adopted so as to protect their position.
- The UT decision is legally binding and opens the door for businesses that have incurred irrecoverable VAT on costs on the sale of companies in the last four years to make repayment claims.
Source Crowe
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