Commentary

V4.136C Exemption for finance—instalment credit finance, administrative arrangements and related intermediary services

Part V4 Exemption, zero-rating and reduced rates

V4.136C Exemption for finance—instalment credit finance, administrative arrangements and related intermediary services

V4.136C Exemption for finance—instalment credit finance, administrative arrangements and related intermediary services

VATA 1994, Sch 9 Group 5 items 3, 4, and 5—scope of the exemption

Exemption is extended to:

  1.  

    (1)     the provision of the facility of instalment credit finance in a hire-purchase, conditional sale or credit sale agreement for which facility a separate charge is made and disclosed to the recipient of the supply of goods1

  2.  

    (2)     the provision of administrative arrangements and documentation and the transfer of title to goods in connection with the supply described in head 1 if the total consideration therefor is specified in the agreement and does not exceed £102, and

  3.  

    (3)     the provision of intermediary services in relation to the above by a person acting in an intermediary capacity3

Activities within the exemption

HMRC defines hire-purchase, conditional sale and credit sale as follows4:

  1.  

    •     Conditional sale: consideration is payable by instalments and the goods remain the property of the seller until the full price is paid and/or any other conditions are met by the customer. The full amount of VAT on the goods is normally payable with the first instalment; any charge for credit finance will be exempt provided the disclosure

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