VAT recoverable on company director’s costs of defending a legal action
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VAT recoverable on company director’s costs of defending a legal action
VAT recoverable on company director’s costs of defending a legal action
Tue 19 Mar 2019
The Court of Appeal decision in Praesto Consulting concerned whether input VAT could be deducted from invoices concerning civil action against company directors, made out in the name of the director but paid for by the company.
The Court of Appeal decision was by a 2 to 1 majority. The majority decision considered that on the particular facts of this case the substance of the arrangement was that these costs would be the company’s costs. The dissenting judge considered the costs did not have the required direct and immediate link to the company’s general costs to justify input VAT recovery.
Please get in touch with a member of Mazars’ indirect tax team for a further discussion of your business’s ability to recover input VAT.
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