Customs in VAT recovery backdown
HM Customs & Excise confirmed today that it will not appeal a VAT tribunal decision in favour of Halladale, the Scottish commercial property developer.
The case concerned the recovery of VAT for the cost of listing on the Alternative Investment Market. It signifies that Customs is broadly resigned to losing ground in its attempts to block recovery of VAT in relation to corporate finance and restructuring activities.
John Graham, VAT partner at Big Four firm Deloitte & Touche, believes the Customs back down is significant. ‘The implication for other businesses seeking to obtain AIM listings, and indeed in other share transactions, is that VAT incurred on many of the professional fees is likely to be recoverable.
‘This will be of particular importance to small, high-growth businesses, who do not necessarily have the funds available to bear such costs.’