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Updated HMRC guidance on VAT on holding companies

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HMRC has now published updated guidance on VAT and holding companies in the form of amendments to its VAT Input Tax manual. The updated guidance clarifies that in order for a company to recover input VAT on its costs it must:

  • be the recipient of the supply;
  • undertake a business activity for VAT purposes; and
  • be VAT registered/registerable at the time the cost is incurred.

The costs must also have a direct and immediate link with the holding company's taxable supplies, although costs without such a link may still be deductible where they have a direct and immediate link with the business activity of the holding company or relevant VAT group as a whole.

Issue: 1352
Categories: News , Indirect taxes , VAT
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