We provide invaluable support to investors on potential sales or acquisitions, providing a focused, risk-based approach to the due diligence process, giving honest, practical advice to help clients assess and manage potential VAT risks and exposures.
We also advise and assist clients structure transactions in a VAT efficient way, including advice and assistance with VAT registration/VAT grouping and intra-group service agreements where appropriate.
We provide specialist advice to help clients manage HMRC challenges through helping clients ensure that contractual arrangements support VAT recovery wherever possible and minimising VAT costs on deal fees (e.g. VAT exemption often applies to corporate finance fees).
We advised our client to enter into a management services agreement (and a VAT Group) between the holding company and the trading company it had acquired.
The property was being sold by a company set up by several GPs (tenants). Due to VAT anti-avoidance rules, the lease to the GPs was VAT-exempt and leases to other tenants were taxable. The property company was partially exempt but appeared to be applying an unapproved VAT recovery method.
We reviewed the historical correspondence with HMRC and the calculations that the property company had been carrying out. We identified a discrepancy that would have resulted in a significant retrospective VAT exposure plus an additional ongoing VAT cost for our clients had it been discovered by HMRC.
The outcome for the vendor meant they paid the VAT at stake on completion of the deal and the ongoing reduction in profits was reflected in price negotiations.
We had a client engaged in a business-to-business (B2B) contract to directly supply goods from Italy to Germany
The client incurred significant VAT costs in acquiring a trading company via an acquisition vehicle (holding company). There were concerns that HMRC would not allow them to recover the VAT because the holding company paid the fees.
We advised our client to enter into a management services agreement (and a VAT Group) between the holding company and the trading company it had acquired. This would then enable full VAT recovery for the holding company on the fees it has incurred.
Although VAT would normally be chargeable on management fees, because the holding company and trading company were in the same VAT group, there would be no VAT chargeable.
Our clients were private individuals selling the shares in the company they’d built from scratch.
Significant costs accrued concerning the sale of their shares in the company, concerned because they had incurred the costs themselves. HMRC would not allow them to recover the VAT they had paid because their proceeds from the deal were entirely VAT-exempt.
After reviewing the fees they had accrued, we determined that while some fees had been appropriately treated as subject to VAT, there were certain fees, notably a significant corporate finance fee, that should not have been subject to VAT. We liaised with the corporate finance providers and persuaded them to reissue their invoices with no VAT and refund the overcharged VAT to our client.
This would enable full VAT recovery for the holding company on fees incurred. Although VAT would normally be chargeable on management fees, because the holding company and trading company were in the same VAT group, there would be no VAT chargeable.
While share purchases themselves are usually exempt from VAT, related costs, like legal or advisory fees, often attract VAT. Without proper structuring, that VAT can become a non-recoverable cost. We help ensure the right setup is in place to support VAT recovery where possible.
VAT due diligence involves reviewing a target company’s VAT history, compliance, and risk exposure. It helps identify hidden VAT liabilities that could impact negotiations or future profitability. We provide focused, practical VAT due diligence support for both buyers and sellers.
Yes, but only under certain conditions. If the acquiring company is structured correctlyVAT on deal costs may be recoverable. We advise on how to achieve this.
VAT grouping allows multiple companies to be treated as a single taxable entity for VAT purposes. This can eliminate VAT on intra-group charges and help with VAT recovery on acquisition-related costs. We help set up VAT groups when it's beneficial.
Not always. In some cases, corporate finance services qualify as VAT-exempt, depending on how they are structured and invoiced. We review the details and, where applicable, assist in reclaiming overcharged VAT.
