A common area of concern for entities that act as intermediaries for financial transactions, is whether their supplies fall within the VAT exemption for financial services. Over the last few years, the financial services industry has undergone a big transformation and this year has seen a number of new organisations in the fintech space ranging from cryptocurrency exchanges to peer-to-peer lenders.
From a VAT perspective, the starting position is that services provided between UK businesses are subject to the standard rate of VAT (currently 20%) unless an exception applies. There is a VAT exemption applicable to certain supplies of financial services, and exempt supplies are not subject to VAT.
Source Crowe
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