Recovery of VAT on transaction costs
In many M&A deals it is common practice for the acquirer to incorporate a new company (‘Bidco’) to acquire shares in the target. As transactions progress, a Bidco will typically incur VAT in respect of deal costs so it is important that transactions are appropriately structured so that this VAT may be recovered where possible by the Bidco.
On 21 February 2013 the Court of Appeal handed down its judgment in BAA Limited v Revenue and Customs Commissioners. The decision serves as a warning that the recovery of VAT on such transaction costs should not be taken for granted, and sets out important factors in relation to VAT recovery that should be considered as part of any transaction.
The decision concerns approximately £6.7million of VAT incurred by Airport Development and Investment Limited (ADIL), the bidco incorporated in connection with the acquisition, by a consortium led by Ferrovial SA, of what was then BAA PLC. The acquisition completed on 26 June 2006, and on 22 September 2006 ADIL joined the BAA VAT group. Prior to doing so, ADIL paid professional fees to a number of advisers, and incurred the disputed VAT thereon. HMRC denied ADIL recovery of this VAT…
If you are registered and logged in to the site, click on the link below to read the rest of the Taylor Wessing briefing. If not, please register or sign in with your details below.
News from Taylor Wessing
News from The Lawyer
Briefings from Taylor Wessing
When considering whether a sign ‘consists exclusively of the shape of goods that is necessary to obtain a technical result’, the court is not confined to looking at the sign as filed.
Iceland Foods applied to register in the UK the trademark ICELAND (both figurative and word marks) for fish, meat, game and poultry.
Analysis from The Lawyer
The city-state is working hard to become a global wealth management hub, and law firms are gearing up for a prosperous new world
Financial disputes are starting to dominate the English courts as the long-awaited fallout from the downturn finally comes to town