My client (A) provided services to an M&A firm (B) in connection with the sale of the share capital owned by B's client (C) to another party (D). B earned a success fee on the sale of C's shares to D. B correctly invoiced its success fees on the transaction as exempt from VAT. My client A wants to know whether he is also entitled to invoice B for his share of that success fee as an exempt supply for VAT purposes?
The services provided by A to B included identifying potential acquirers of C's shares with whom A had knowledge and connections and contacting these with a view to introducing them to C, via B. As part of this service A provided these potential acquirers with a company profile of C's company and held discussions regarding the fit of C's company with their businesses in order to generate and test their interest in acquiring C's company. The evential acquirer of B's shares was not one of A's introductions.
FYI: A also provided advisory services to B in the drafting of the Information Memorandum of C's company which were invoiced separately to B with standard rated VAT.