A&M Indirect Tax services

Managing VAT in the financial services & insurance sectors can be highly challenging, often encompassing many grey areas which can be daunting for businesses. The non-compliance risks are especially acute as the exemption applicable to certain financial and insurance services means that FSI businesses tend to suffer a restriction on the level of VAT that can be recovered – leading to an impact on business’s bottom lines.

A&M can provide advice on the VAT liability of sales and purchases as well as exploring opportunities to generate VAT savings on purchases, improve the working capital position and help drive profitability, as well as managing the overall risk of non-compliance.

Typically, VAT exemptions should be construed narrowly given they are an exception to the standard rule that supplies are subject to VAT at the standard rate of 20%. However, VAT in the financial services sector has been an area of particular interest for HMRC in recent years, with the scope of some exemptions growing narrower (e.g., payment processing), whereas the exemption for the management of special investment funds (SIFs) is trending broader in both the UK and in the EU. This constantly shifting landscape is a result of changes in practice and case law. A&M’s indirect tax team has a wealth of experience across the financial services and insurance sectors and is well-versed in the typical VAT issues encountered both on a day-to-day basis and during non-BAU events such as transactions or restructurings.  

A&M offers real-time collaboration throughout the transaction life cycle with experts at hand to offer comprehensive advice and solutions. 

How can A&M add value? 

• FSI Mergers and Acquisitions: advising on the VAT treatment of complex transactions and business structures
• Maximising the recovery of VAT on transaction and restructuring costs
• Offering a comprehensive approach to the transaction lifecycle relating to business acquisitions and integration, disposals and preparation, and restructuring 
• Produce “day-one” readiness plans for new entities post-transaction completion 
• Structure carve-outs transactions 
• Offer solutions to indirect tax issues identified as part of the due diligence process (both buy and sell side) 
• Advising on the formation of new investment vehicles 
• Advising on the complexities arising from the application of the insurance and financial services intermediary exempt, and other potential exemptions and reliefs
• Advising on outsourcing arrangements for financial institutions
• A&M can help finance managers understand the complexity surrounding VAT place of supply rules  
• Conducting VAT health checks / regular reviews of the VAT affairs of FSI businesses
• Utilize market-leading technology to reduce time and save costs by automating VAT compliance, providing a end-to-end solution 
• Liaison with the UK tax authority (HMRC) including dealing with enquiries, disputes, penalties, and interest charges

LEARN MORE ABOUT OUR OTHER INDIRECT TAX SERVICES