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Post Info TOPIC: Is interest and bank charges included on vat return as an input?
spudlover


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Is interest and bank charges included on vat return as an input?
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Hi all,
This is a great site, I have found many answers here smile but I am stuck, should interest and bank charges be included on the vat return as an input?

Thanks

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kjmcculloch


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In short, no.

Kris

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spudlover


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Hi Kris,
short but sweet! thanks

Alice

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BackOfficeGroup


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Kris

I would say bank charges are T2 exempt and not outside the scope of VAT, so should be included.

A difference of opinion here.

P

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Scrat


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I'm getting deja vu - I know this subject is quite complicated and has been dealt with quite throughly before on the forum, but as usual I can't find the thread with the search facility!

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Donna CBK


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From my conversations with HMRC (VAT workshop) it is T2 and should be included - Exempt from VAT.

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Wella


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Quote from HMRC website

2.10 Current, deposit and savings accounts

Many of the charges made by banks, building societies or similar organisations in connection with the operation of a current, deposit or savings account will be exempt. Exceptions include charges made for:

  • the issue of certain types of financial certificate (for example, audit and balance certificates supplied to third parties)
  • the extra cost of special printing or overprinting of cheque books and paying-in books.

Please note that the above list is not exhaustive.

Bill



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RobH


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Remember that interest received is VATable (output tax) if you are using Fixed Rate Scheme.

Rob

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BackOfficeGroup


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is it? I did not know that!!

P

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RobH


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Hi Phil,

yes it suddenly becomes part of turnover for vat purposes I believe, but only on FRS.

Rob

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BackOfficeGroup


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Rob

That really does not make sense, as if they are exempt from VAT, then no matter what scheme you use, they should be exempt, although I do see where they are coming from.

I guess they make the rules!!

P

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RobH


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Hi Phil,

here's the link which says 'bank interest on business accounts'

http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm#4

Bit crazy though!

Rob

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