The advisor is a corporate finance firm per FSA and the advisor, his client and the business acquired are in the UK. The advisor helped the client to find the target business and negotiate the purchase and advised on how to finance the purchase. If the transaction related solely to the issue of securities, the transaction would be exempt. But where the issue of securities is part of the advice regarding the purchase of the business as a whole and cannot be separated, what is the VAT liability?
Mohan Varma
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Replies (2)
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Exempt and Taxable
It is, unfortunately, incumbant upon the advisor to determine which elements of his services qualify for exemption and which are taxable and the value of each. VAT should then be charged accordingly.
If the recipient company is able to recover VAT it may be easier simply to tax the lot and this is accepted by HMRC.
Regards
Paul Taylor
VATease - VAT Advice
Affects advisor too
Thanks for your advice.
The VAT rate applied affects the advisor who bills too by its effect on the partial exemption calculation. If the whole of it is billed as standard rated, HMRC may claim that part of it is exempt and reduce the input VAT by amending the partial exemption calculation.