- The UK Supreme Court has denied an appeal by loan administration services provider, Target Group Ltd, against the tax office regarding VAT exemption.
- Target Group Ltd argued that its services should fall under the financial services exemption in the Value Added Tax Act 1994.
- The company sought a non-statutory clearance from His Majesty’s Revenue and Customs on its VAT liability for loan services in 2015, but the tax office disagreed.
- The financial services exemption applies to transactions for deposits and current accounts, payments, transfers, and debts, but not debt collections.
- The court ruled that the services provided by Target Group Ltd must in themselves have the effect of transferring funds and changing the legal and financial situation, which they do not.
- The court also rejected the argument that Target Group Ltd’s role in making accounting entries on loan accounts fell within the exemption.
- The appeal was dismissed, upholding the tax office’s position that Target Group Ltd’s services are not exempt from VAT.
Source: bailii.org
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
