Loading…

Recovery of input tax on financial and insurance services after Brexit

On 9 November 2020 the Chancellor confirmed that when the UK leaves the EU at the end of the transition period (31 December 2020), businesses supplying financial and insurance services to EU businesses will be able to recover input tax attributable to these services.
Current position

Last updated: 23 November 2020

Current position ending on 31 December 2020

Ordinarily supplies of financial and insurance services to customers located within the EU are exempt with no right to VAT recovery. The current legislation allows UK businesses to recover input tax on certain services made to business customers outside of the EU. These services include some financial and insurance services as well as intermediary services associated with these supplies.

About the authors

Socrates Socratous

+44 (0)20 8037 3113
socratouss@buzzacott.co.uk
LinkedIn

Thomas Mobee

+44 (0)20 7556 1320
mobeet@buzzacott.co.uk
LinkedIn

Last updated: 23 November 2020

Current position ending on 31 December 2020

Ordinarily supplies of financial and insurance services to customers located within the EU are exempt with no right to VAT recovery. The current legislation allows UK businesses to recover input tax on certain services made to business customers outside of the EU. These services include some financial and insurance services as well as intermediary services associated with these supplies.

New position

New position from 1 January 2021

Businesses supplying financial and insurance services to EU businesses will be able to recover input tax attributable to these services. While this change had been expected following draft legislation published last year, its confirmation is good news for UK businesses in the financial and insurance sectors, and ensures they will be on par with other non-EU suppliers. Specified services supplied to non-EU customers will continue to benefit from the current rules.

What should you do?

What should you do?

If you provide financial or insurance services, you should consider how these changes will affect you from 1 January 2021 and where appropriate, review your current VAT accounting processes - in particular the VAT recovery method used for attribution of costs associated with these supplies. It should be noted that these changes apply only to specified supplies, not all financial services, and you should seek specialist VAT advice where necessary.

Get in touch
Get in touch

To find out more or to confirm the extent to which you might be affected by the change, please get in touch with your regular contact at Buzzacott or a member of our VAT team by filling out the form below.

Please complete all required fields above.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
close back
Your search for "..."
did not yield any results.
... results for "..."
Search Tags