The VAT review for December 2020

This month’s review covers the launch of the European Commission’s roadmap as the first step in its review of the VAT treatment of financial services. A similar review commenced before the 2008 financial crisis lasted for eight years and produced no tangible result, so the Commission’s aim to put together a Directive by the end of 2021 seems ambitious. Sonaecom is another case on abortive share acquisition costs with an unsurprising result but potentially an important gloss on a holding company’s ability to deduct input VAT. Finally, there is confirmation from the chancellor that supplies of financial services to EU customers after the end of the transition period will benefit from input VAT deduction, and HMRC has clarified the scope of the application of the exemption for welfare services to school holiday clubs.