Liability ― credit, debts and related services

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note covers the liability of credit, debt and related services.

For an overview of liability more broadly, see the Liability ― overview guidance note.

For in depth commentary on the legislation and case law on the liability of credit, debt and related services see also De Voil Indirect Tax Service V4.136B.

Granting and managing credit

VAT exemption applies to the service of granting credit and making advances. Examples of exempt activities include advancing loans and providing overdraft facilities.

Exemption can also extend to the provision of credit by a business in connection with goods or services it is supplying. However, for exemption to apply there must be a separate charge for the credit which is disclosed to the recipient of the supply of goods or services.

The management of credit by the person granting it is exempt. However, where the management is outsourced to another person exemption does not normally apply (although see further below).

Granting credit

The UK VAT legislation provides for exemption for the ‘making of any advance

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Employment Tax

Company cars

Company carsIntroductionCompany cars are one of the most common taxable benefits. The rules for calculating the benefit are complex, and the reporting requirements are more onerous than most benefits. Company cars are covered by very specific legislation. Detailed guidance on each of the following

14 Jul 2020 11:15 | Produced by Tolley Read more

Personal Tax

Payment of the remittance basis charge

Payment of the remittance basis chargeRemittance basis chargeThe remittance basis charge is an annual charge payable by ‘long-term’ UK residents for the privilege of claiming the remittance basis.Taxpayers who wish to utilise the remittance basis (but do not qualify for it automatically) must pay

14 Jul 2020 12:52 | Produced by Tolley Read more

Value Added Tax

UK VAT invoice requirements

UK VAT invoice requirementsThis guidance note provides details of the information that must be shown on a valid tax invoice. Businesses supplying goods and services that are liable to the standard or reduced rate of VAT are required to issue a tax invoice to another VAT registered person.If the

14 Jul 2020 13:46 | Produced by Tolley Read more

��Ӱ��