VAT issues for financial services groups
VAT issues for financial services groups

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • VAT issues for financial services groups
  • What are the key VAT issues for banks and financial institutions?
  • Should banks charge VAT on their supplies?
  • When can banks recover input VAT?
  • VAT grouping and planning

BREXIT: This document contains guidance on subjects impacted by the UK’s withdrawal from the EU including:

  1. on 1 March 2019 the Value Added Tax (Input Tax) (Specified Supplies) (EU Exit) (No 2) Regulations 2019, SI 2019/408 were laid before parliament. These regulations will enable businesses to reclaim VAT incurred on specified supplies of exempt financial services made to customers in the EU from a date to be appointed by Treasury order. The regulations will only come into force in the event that the UK withdraws from the EU without a negotiated arrangement that covers this point. The regulations extend the existing treatment allowing businesses to reclaim VAT incurred on such supplies made only to customers outside the EU and is intended to bring the VAT treatment of supplies to EU customers into line with supplies to customers in the rest of the world after Brexit. The regulations also ensure that partial exemption special methods (PESMs) agreed before exit day will be interpreted in accordance with the revised VAT Specified Supplies Order after that date. This instrument replaces SI 2019/175, which will not now be commenced

  2. on exit day (31 January 2020) regulation 4(1) and 4(2) of the Value Added Tax (Miscellaneous Amendments, Revocation and Transitional Provisions) (EU Exit) Regulations 2019, SI 2019/513 came into force. This regulation ensures that