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Legal, accountancy and other professional fees

VAT recovery on legal, accountancy and other professional fees is a common area of focus for HMRC. A key question to ask before recovering VAT is whether the VAT incurred on these kinds of costs is really ‘input tax’. In other words, is the expenditure for the purposes of the business?

There are specific challenges when professional fees are incurred in relation to holding companies (particularly with regard to acquisitions, disposals and restructures) and these are covered separately in the Holding companies ― overview guidance note.

Similarly, the VAT recovery position where professional fees are incurred as part of a transfer of a business as a going concern