The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note is intended to provide details on the VAT treatment ofintermediary services provided in connection with the provision offinancial services.
It is very common for supplies offinancial 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 ofintermediary services connected with financial services are often exempt from VAT.
A supply ofintermediary services consists ofbringing together, with a view to the provision offinancial services:
The performance ofpreparatory work before the conclusion ofa financial services contract can be exempt from VAT. However, exemption does not include a supply ofmarket research, product design, advertising, promotional or similar services (see below).
However, the collation or collection ofinformation will be exempt from VAT if the underlying financial service is exempt from VAT under VATA 1994, Sch 9, Part II, Group 5.
In order for an intermediary service to be exempt from VAT, the party must be acting in the following capacity:
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