VAT recovery boost for UK financial services industry
One benefit of Brexit for the UK financial services industry was announced today: VAT recovery will be allowed on the VAT costs of supplies to EU customers of most financial services by UK-based businesses, from 1 January 2021.
Previously, this VAT would not have been recoverable, and only the costs of similar supplies made to non-EU customers was allowed to be reclaimed. This regime. known as the Specified Supplies rules, will now be extended to cover supplies of relevant VAT exempt financial services made to any non-UK customers. This is aimed at maintaining the UK’s competitiveness for its financial services industry.
The Chancellor, Rishi Sunak, made the announcement as part of his speech on the future of UK financial services to the House of Commons today. The new legislation is available here.
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About the author
Linda Adelson is Rosetta Tax’s resident VAT expert, who has specialised in all aspects of VAT and indirect tax for over 25 years. One of just a handful of VAT solicitors in the UK, Linda is ranked by the Legal 500 as a Leading Individual for the depth of expertise in her field.
Find out more about Linda and our VAT advice and consultancy services for businesses.
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