- When a company needs to raise capital, directors need to consider tax, legal, and other implications
- VAT implications of different methods of raising capital are often overlooked
- Equity funding through share issue is not considered a business activity and money received is outside the scope of VAT
- VAT incurred on professional fees for share issue can be recovered as general overhead
- Issue of other securities for capital raising is treated the same as share issues for VAT purposes
- Sale of existing shares is considered a business activity and is exempt from VAT
- VAT incurred on professional fees for sale of shares is not recoverable if directly attributable to an exempt supply
Source: lubbockfine.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
