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Updated HMRC guidance on VAT on holding companies

printer Mail

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