VAT - Don’t end up over a Barrel!
One little story that caught my eye today was over the confusion organisations sometimes have over whether they should be charging VAT for their Financial services or not.
The story mentioned above, talks about Financial Packagers being exempt from charging VAT, but when they bunch together to form an Alliance then the monies they receive from lenders, for commission/marketing etc., ARE vatable.
The story illustrates just how common place such confusion is. It also talks about one organisation being told by their accountant that they did not need to charge VAT, only to later learn from the Customs and Excise that they did need to charge VAT. My advice for anyone pondering such an issue is to ask the Customs and Excise directly and to cut out the accountant - it is always better 
to hear things straight from the horse’s mouth.
The story talks about one organisation facing a bill of £750,000 for 6 years of unpaid VAT - so you might well end up wearing a barrel as well as being put over one!
For the record, item 9 from Notice 701/49 of the HMRC VAT manual tells you which supplies of intermediary services are exempt from VAT. And item 10 details what is meant by the term “financial service”.
