UK Supreme Court Blocks Loan Service Provider From VAT Exemption

Loan administration services provider Target Group Ltd lost its UK Supreme Court appeal against the tax office over whether 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, contending that they are exempt from VAT, but the tax office disagreed.

The financial services exemption applies to transactions for deposits and current accounts, payments, transfers, and debts. However, debt collections fall out of scope of the exemption.

Target Group administers loans made by ...