Holding companies ― who is the recipient of the supply?

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note examines how to identify the recipient of a supply for VAT purposes in the context of holding companies.

It is common for VAT to be incurred on a variety of costs associated with acquiring, holding or disposing of companies. However, a holding company can only recover VAT where it is the ‘recipient’ of the supply in question (amongst other factors).

Often the question of who receives a supply is straightforward. However, sometimes complexities can arise (particularly for holding companies).

For an overview of VAT and holding companies generally, see the Holding companies ― overview guidance note.

Is the holding company the recipient of a supply?

A holding company will only be able to recover VAT on costs where it is the recipient of the supply in question.

HMRC suggests in its guidance that a holding company is the recipient of a supply where all of the following conditions are satisfied:

•
it has entered into the contract for the supply (or had the contract novated

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