Holding Companies – incurring VAT on costs is one matter – recovering it looks to the “direct and immediate” link to its taxable business activities.
The HMRC updated VAT guidance on the VAT status of a holding company as well the principles to follow to enable any VAT recovery on the costs it will incur has been issued.
In our VAT and Brexit world it illustrates the interaction between the UK Courts and the EU Court of Justice in determining VAT treatments in particular instances. As Lord Bridges of Headley, DExEU, recently commented the intention, in the existing administration in Westminster, is to ensure UK Business secures “stability and certainty” in all matters Brexit and that includes the transposition of EU Law into UK legislation around VAT matters. EU Court rulings will remain as precedents for UK businesses to rely on although we understand that post Brexit the UK will be able to legislate for particular situations as they arise.
Clearly current legislation plans and processes for VAT in the UK post Brexit world will need close attention through the General Election that’s just been called in the UK for June 8th.
VAT and Holding companies is an issue that has rumbled on over my many years in a VAT adviser role – for those interested in the legal history catch up HERE so to get up to speed with the latest position post the CJEU decision in the joint cases of Larentia and Minerva and Marenave HMRC internal guidance is a useful resource:
Definition and VAT status of Holding Companies
VAT recovery by Holding Companies
With the full gamut of VAT issues under consideration from HMRC’s agenda on Making Tax Digital, the Brexit impact on VAT systems, Use and Enjoyment changes re Telecoms services to the continuing VAT consultations emerging from the EU – e book liability plans – domestic reverse charges – the end of the VAT return through use of SAF-T; it’s important to stay VAT aware.
As ever call your usual VAT contact here at Centurion VAT if help is required. www.centurionvat.com
firstname.lastname@example.org T: 01633 415390
Information correct as at 24/4/2017
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