Supplying Financial or Insurance Services to Customers outside the UK? A VAT Opportunity exists.
Whilst the end of the transition period, or Brexit as we call it, was not meant to bring a great deal of change to the supply of services there have been some bits of “tinkering” in liability changes in the Financial and Insurance service sector which are important to note.
They are very specific in their application, but the end result is that businesses involved in these activities will now be able to recover more VAT incurred on their costs than they would been allowed in the period to the 31 December 2020.
The nature of the affected services are as follows:
- financial services supplied to persons belonging outside the UK or directly related to an export of goods
- insurance services supplied to persons belonging outside the UK or directly related to an export of goods
- the making of arrangements for these specified supplies
These will need to be services supplied to a person who belongs outside the UK but as noted the benefit for such businesses will be that for costs incurred from the 1 Jan 2021 you will be entitled to recover as input tax, VAT incurred on costs relating to the provision of these services. The link to the HMRC commentary is here .
For those businesses operating in this area there may be changes to a Partial Exemption Special Method to consider as a result as well and with the impact of CV19 on trading patterns it would be worthwhile checking whether a temporary change to any Partial Exemption method you use would be a further benefit to consider. For more information of the temporary relief HMRC have announced in this regard please read our news byte HERE
Should any VAT support be required then please do get in touch with your usual Centurion VAT expert or email us on firstname.lastname@example.org and we would be happy to assist in this regard. As ever always here when VAT gets complicated.
For the avoidance of doubt, the content recorded in this news article does not constitute formal advice and we do not guarantee the accuracy of any information provided at the time of reading. It is always recommended that you seek professional advice before acting on any of the news articles or information included.