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The holding company

02 December 2014 / Mike Thexton
Issue: 4480 / Categories: Comment & Analysis , BAA , input tax , Polysar , VAT

Claiming input tax in light of recent Revenue guidance


  • As a result of the decision in BAA Ltd HMRC have reviewed their guidance on VAT and holding companies.
  • In the Polysar case the CJEU determined that the holding company had to undertake an economic activity.
  • News Release 59/93 which set out what has been the policy on holding company recovery from then to now.
  • HMRC’s guidance envisages two situations in which a holding company can recover VAT.
  • In two recent First-tier Tribunal cases HMRC’s view that consideration must pass has been upheld.

In Revenue & Customs Brief 32 (2014) HMRC announced that they have reviewed their policy on the recovery of input tax as a result of the Court of Appeal’s decision in BAA Ltd v HMRC [2013] STC 752.


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