Topic: Holding companies, VAT
My client has just had a VAT audit and HMRC have queried 2 invoices.
Client is a holding company and is VAT registered. Its two subsidiaries are in business but making exempt supplies. It provides VATable management services to them
The two which are queried are shareholder agreements and financing documentation on the purchase of leaseholds, to be held in the subsidiaries
I would tend to argue that the first is allowable (an acquisition of a company to which taxable supplies are made) but the second perhaps not, because it relates more closely to an exempt supply ie the letting of properties by the subsidiaries.
Any thought appreciated.