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View the related practice notes about Taxable supply

When does VAT apply?

A transaction must have five elements for UK VAT to be chargeable. It must:•be a supply of goods or a supply of services•be a taxable supply•take place in the UK•be made by a taxable person, and•be made in the course or furtherance of any business carried on by that personThis Practice Note explains what each of those five elements means.This Practice Note does not cover importation of goods or the circumstances where a UK person may be required to pay UK VAT on the supply of services from abroad, ie the reverse charge, for which see Practice Notes: VAT—the reverse charge on cross-border supplies and VAT—importing goods.This Practice Note includes references to EU Directives and case law; for information on the ongoing significance of EU Directives, and of judgments of the Court of Justice for the UK’s VAT rules, see Practice Note: Retained EU law and tax.A supply of goods or a supply of servicesThe first element has three parts. A transaction must:•be a ‘supply’•be categorised as either a ‘supply...

VAT recovery on corporate transactions

VAT is recoverable by a taxable person if it is attributable to taxable supplies made in the course or furtherance of a business. For an explanation of the rules on VAT recovery generally, see Practice Note: When can a person recover VAT?VAT paid on costs incurred in corporate transactions, including on the professional fees of accountants, lawyers and other advisers, may be recoverable depending upon the circumstances of the transaction. This Practice Note looks at the recovery of VAT on the costs of business sales and acquisitions, share sales and acquisitions, corporate restructurings, and share issues. It also covers VAT recovery by holding companies.For information on the recovery of VAT by a UK acquisition group in a private equity-backed buyout, see Practice Note: Tax and buyouts—deductibility and VAT recovery of acquisition group deal costs.This Practice Note contains references to judgments of the EU Court of Justice. For information on the ongoing significance of EU law in the UK following the end of the Brexit implementation period on 31 December 2020,...