BB/30C/03 VAT—exemption of “debt negotiation services”

Part V16 Forms and other HMRC material

BB/30C/03 VAT—exemption of “debt negotiation services”

BB/30C/03 VAT—exemption of “debt negotiation services”

Business Brief, Issue 30. 24 December 2003

This Business Brief article has been issued to clarify Customs' change in policy on the VAT liability of “debt negotiation services”, following the Tribunal decision in the case of Debt Management Associates. As a result of this change, the services of “debt negotiation”, provided by an intermediary, will be exempt from VAT.

What are “debt negotiation services”?

“Debt negotiation services” typically seek to acquire favourable repayment terms for a debtor who is experiencing difficulty in making repayments under terms already in place.

This type of service may include one or more of the following—


    —     taking details of income and expenditure, along with details of the creditor(s) and the amounts outstanding, and preparing and presenting a payment plan to the creditor;


    —     agreeing to act on behalf of

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