The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.
This guidance note is intended to provide details on the VAT treatment of intermediary services provided in connection with the provision of financial services.
It is very common for supplies of financial services to involve other businesses acting as intermediaries between the parties buying and selling the financial services. Other businesses may also be involved in the transaction providing specialist advice or assisting with ensuring that the transaction takes place. The supply of intermediary services connected with financial services are often exempt from VAT.
A supply of intermediary services consists of bringing together, with a view to the provision of financial services:
persons who are or may be seeking to receive financial services
persons who provide financial services
The performance of preparatory work before the conclusion of a financial services contract can be exempt from VAT. This does not include a supply of market research, product design, advertising, promotional or similar services unless it forms part of a composite supply of exempt intermediary services (see below).
In order for an intermediary service to be exempt from VAT, the party must be acting in the following capacity:
must be acting as an intermediary in relation to an exempt financial services transaction
must be providing an intermediary service in relation to the exempt financial services transaction
if the financial services transaction falls within VATA 1994, Sch 9, Part II, Group 5, item 1, 2, 3 or 4, the intermediary must be undertaking work that is preparatory to the
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