- Court of Appeal overturned decision of Upper Tribunal on deductibility of VAT on professional fees in connection with share sales
- Hotel La Tour Ltd sold shares in Hotel La Tour Birmingham Ltd to finance construction of new hotel in Milton Keynes
- Professional fees incurred in sale included market research, buyer shortlisting, financial modeling, and tax compliance
- HMRC disallowed input tax recovery on basis that fees were incurred for exempt supply (sale of shares)
- First-tier Tribunal allowed appeal, stating direct link between professional services and downstream taxable activities
- Upper Tribunal affirmed input tax recoverable in these circumstances, citing CJEU case law on fiscal neutrality
- HMRC appealed to Court of Appeal, which considered possibility of attributing inputs to overheads if no direct and immediate link
Source: rpc.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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