TAX PARTNER PRO
a

VAT on M&A Transactions

Making the complex simple

Home 5 VAT Advice 5 VAT on M&A Transactions
Make an enquiry

Specialist M&A VAT support, from due diligence services, transaction support and VAT structuring advice, to minimise the impact of VAT on M&A transactions, both buy-side and sell-side.

VAT Due Diligence

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.

Contact Us

VAT Structuring

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.

 

Contact Us

VAT recovery on deal fees

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).

Contact Us

Case Study

VAT on M&A Transactions

VAT Due Diligence

Medical Centre VAT issues

Intro

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.

Issue

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.

How we solved it

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

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.

VAT Structuring

VAT structuring to secure VAT recovery

Intro

Our client acquired shares in a company, this incurred significant costs on professional fees (due diligence, legal fees, etc)

Issue

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.

How we solved it

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.  

The outcome  

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.

VAT recovery on deal fees

Corporate Finance VAT treatment

Intro

Our clients were private individuals selling the shares in the company they’d built from scratch.  

Issue

Significant costs accrued concerning the sale of their shares in the company, concernedbecause 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.

How we solved it

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.                                                                              

Outcome

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.

More Services

VAT &
Property

VIEW ALL

VAT &
Online Trading

VIEW ALL

VAT &
Travel Services

VIEW ALL

HMRC
Enquiries

VIEW ALL

VAT &
Financial Services

VIEW ALL

VAT on
M&A Transactions

VIEW ALL

VAT &
Cross Border
Transactions

VIEW ALL

Please tick

15 + 13 =