Transcription of VAT focus The financial services exemption
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VAT focus The financial services exemption
~ 24 May 2013 The rst step is to identify which services qualify for the nancial services exemption and which follow the normal rules. What qualifies?!ere is a formal list of the nancial services which qualify for exemption in the legislation (VATA 1994 Sch 9 Group 5, re"ecting art 135(1)(b) (g) of the EC VAT Directive 2006/112/EC). HMRC s interpretation of qualifying nancial services is set out in Notice 701/49. Rather than dryly listing the exempt supplies given in the legislation and HMRC s interpretations, this article will take the reader through common scenarios which show the basic principles in practice. Example 1: Loans (and other supplies of credit)A company lends money to customers. What are the VAT implications? !e supply of credit to a UK customer quali es for exemption under VATA 1994 Sch 9 Group 5 item 2.
www.taxjournal.com ~ 24 May 2013 The •rst step is to identify which services qualify for the •nancial services exemption and which follow the normal rules. What qualifies?!ere is a formal list of the •nancial services
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