Search the ETC Tax Website

Request a callback

Callback Request

Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to call you back to discuss your enquiry and you will not be charged for this time.

  • This field is for validation purposes and should be left unchanged.
  • Sign-up to our newsletter

    Newsletter Main Form

  • This field is for validation purposes and should be left unchanged.
  • VAT & Financial Services

    Financial services are effectively taxed by restricting VAT recovery for financial services providers, with revenue generated from the provision of financial services typically being VAT exempt. The VAT exemption for financial service can also apply to the services of brokers and other intermediaries, but the rules are complex and there is often a fine line between a service being VAT exempt or being subject to VAT.

    Wide ranging experience

    Although ‘financial services’ covers a wide range of providers, there are specific VAT issues and opportunities that apply to particular financial services and we have years’ of experience advising financial services clients on VAT, including minimising VAT costs.

    Specialists in Intermediary Services

    One of the key areas in which VAT impacts on financial services is the VAT treatment of broker/intermediary services, as any VAT that applies is typically an irrecoverable cost. We have advised many clients minimise the impact of VAT along financial services supply chains.

    Non-VAT registered providers

    Many financial service providers aren’t VAT registered, but this doesn’t mean they are outside the scope of VAT. There can also be hidden VAT costs for financial services businesses, even those that aren’t VAT registered, and we have experience of assisting such businesses to minimise their VAT risk.

    VAT Advice

    There are many VAT reliefs and exemptions that apply in the financial services sector, which is one of the most complex areas of VAT.   

    As a result, although it is possible to generate VAT savings, it is also very important to manage VAT risk, including structuring contractual arrangements to minimise VAT exposures.  

    HMRC closely monitor and regularly challenge financial services businesses on VAT, particularly around grey areas, of which there are many.

    There are invariably a number of conditions that need to be met for VAT exemption to apply and it is therefore advisable that financial services businesses have some form of process to demonstrate that the required conditions are met.

    We can assist financial services clients to develop these processes and help them review their income streams and commercial arrangements to ensure the required conditions are being met.  We can also identify opportunities to maximise the scope for VAT exemption, ensure that commercial arrangements are VAT efficient and help manage VAT risk generally.  

    Financial intermediaries make up a significant part of the financial services sector, from agents and brokers to corporate finance businesses, and the rules around the VAT exemption of intermediary services is notoriously complex.   There have been many VAT cases on the VAT treatment of intermediary commissions and HMRC have historically taken an aggressive approach in defending these, although not always successfully.

    There can also be hidden VAT costs to financial services businesses, even those that aren’t VAT registered, particularly if marketing/advertising services are bought in from outside the UK. 

    Financial services VAT exemptions can also apply to taxpayers whose core business is not financial services.  Retail is a good example, with many retailers/online traders either providing or acting as an intermediary in the provision of credit or other finance products.

    Get in touch with us today

    Call or email us any time or, simply fill out the contact form below and a member of our team will be in touch.

    Contact Form


    Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to - respond / call you back - to discuss your enquiry and you will not be charged for this time.

  • This field is for validation purposes and should be left unchanged.