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Vat exemption for financial services

The withdrawal of this relief would, according to HM Revenue & Customs, result in an additional £16.3 billion of tax revenue being raised a year.

Has he included being able to reclaim VAT on inputs?

2 thoughts on “Vat exemption for financial services”

  1. Our inputs don’t have much VAT being mostly the costs of staff, electricity and money.

    I do wonder whether they’ll put insurance premium tax up though, again.

  2. “Has he included being able to reclaim VAT on inputs?”

    The HMRC numbers are estimates* and are their anticipated net position after VAT input reclaims are taking into account. So the actual cost to the public will be far higher than the number quoted – including local authorities and the NHS which can’t reclaim VAT.

    Likewise, Insurance Premium Tax can’t be reclaimed. He wants to replace it with VAT that can be reclaimed.

    It would be great for VAT registered businesses and the financial sector, awful for the average bloke in the street.

    *HMRC estimates of the tax gap are to be ignored, these estimates are fine though and can be used for wholesale changes to the tax system.

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