VAT May Be Recoverable On AIM Listings

by Robert Lee, Tax-News.com, London

27 August 2003

According to accounting firm PKF, firms may soon be able to claim back part of the costs incurred from share issues and listings on London's Alternative Investment Market in the form of VAT refunds.

This is due to two recent legal cases says PKF, which call into question the Custom and Excise view that such expenses are not recoverable. The first was a judgement of the European Court of Justice that ruled share issues may be construed as economic activity and VAT may therefore be recoverable similar to other business costs.

The second instance cited by PKF was a VAT tribunal concerning costs incurred during an AIM listing which decided that the issue was undertaken to raise the profile of the firm and therefore could be included as a company overhead.

"Companies which have incurred costs with share issues or AIM listings should speak to their VAT adviser and make protective claims now to ensure they are not missing out on substantial cash rewards," advises Tim Buss, PKF director of VAT.

However, PKF has warned that Customs is likely to challenge the judgement in the latter case in an appeal.

"Against this possibility, it may be worthwhile for companies who have incurred such costs to make protective claims now so that the VAT doesn't fall out of time," adds the firm.

Recommended