Mergers and acquisitions – don’t forget the VAT

As autumn approaches, many corporate groups’ thoughts may be turning to optimising their business structure for the future.

Buyers often incur substantial amounts of VAT in the course of a corporate finance transaction, but establishing entitlement to recover it as input tax is not always straightforward, with HMRC generally taking an aggressive approach when scrutinising the recovery of VAT incurred on deal fees.

While VAT may not be the first thing on your mind when planning to expand your business, it is important to consider the structure of any significant corporate finance transaction in advance to maximise the recovery of VAT on associated costs.

Source RSM

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