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Revenue 'facing £100m-plus of VAT claims'

11 February 2010
Categories: News , VAT
Tribunal rules firms can recover tax on acquisition costs

HMRC may be forced to refund £100 million-plus in taxes following the conclusion to a First-tier Tribunal relating to VAT paid in relation to an acquisition according to Deloitte UK.

The tribunal this week released its decision in favour of BAA Ltd in a case concerning VAT deductibility on costs incurred by the airports operator during a 2006 takeover bid by new company called Airport Development and Investments Limited (ADIL)

ADIL – an investment consortium led by Spanish infrastructure group Ferrovial – succeeded in making BAA a wholly owned subsidiary after incurring significant VAT-carrying fees in connection with the deal. 

It joined the BAA VAT group in September 2006 and the representative member then reclaimed VAT as input tax of the group attributable to general overheads. 

HMRC disputed the recovery and raised an assessment to...

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