Is introducers fee Vatable under VAT Notice 701/49 ?

Is introducers fee Vatable under VAT Notice 701/49

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I have a financial intermediary client (Sole Trader) who introducers his clients to banks and they pay him a fee.  

He is claiming such services are exempt but I don't think so based on Under VAT notice 701/49 Para 9.1:

A supplier of an exempt intermediary service is a person who:

  • brings together a person seeking a financial service with a person who provides a financial service
  • stands between the parties to a contract and acts in an intermediary capacity, and
  • undertakes work preparatory to the completion of a contract for the provision of financial services, whether or not it is completed

He meets the first two criteria but uncertain on the third point as he doesn't actually arrange the mortgage with the client.  All I think he does is completes the initial paperwork on the best solution for a mortgage and then refers them onto the bank who fulfils the contract with the client by arranging the mortgage.

 What I am unclear if the by doing the initial groundwork count as preparatory ?

Anyone experiences with similar client or insight would be most helpful

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By User deleted
29th Jun 2016 06:36

You may refer to para 9.3 which says
"Work preparatory to the completion of a contract refers to work done of a specialised nature. This could include helping to set the terms of the contract or making representations on behalf of a client, but would not include work done of a general nature such as administrative or clerical formalities".

This case may throw some light, not entirely relevant though http://www.bailii.org/uk/cases/UKFTT/TC/2012/TC02063.html

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By sash100
29th Jun 2016 14:04

.

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