The Court of Appeal released its judgment in Prudential on 26 March 2024. It held that when commercial activities take place among members of the same VAT group, VAT becomes chargeable if payment is made after the parties are no longer part of the VAT group. The judgment highlights the importance of understanding the implications of any VAT group membership change, which is particularly relevant on a group reorganisation or for any M&A activity. While this affects all sectors, businesses in the financial services sector and other sectors that cannot recover VAT in full will be particularly interested in this case.
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The Court of Appeal released its judgment in Prudential on 26 March 2024. It held that when commercial activities take place among members of the same VAT group, VAT becomes chargeable if payment is made after the parties are no longer part of the VAT group. The judgment highlights the importance of understanding the implications of any VAT group membership change, which is particularly relevant on a group reorganisation or for any M&A activity. While this affects all sectors, businesses in the financial services sector and other sectors that cannot recover VAT in full will be particularly interested in this case.
If you are not a subscriber, subscribe now to read this content.
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