Bank Charges Exempt or Out of Scope for VAT

[vivente]

This seems to be a big area of conflict. Anybody offer an opinion as I can't find anything on HMRC's website?

Sage default is T2 so I've gone with that which meant that I've T23 for PayPal Fees.

 

[faradaykeynes]

Bank charges are exempt from VAT

 

[Scalloway]

HMRC information here

http://customs.hmrc.gov.uk/channels...rtyType=document&id=HMCE_CL_000111#P103_10883

 

[johndon68]

Personally, I've always used T9 for both bank and PayPal fees.

John

 

[vivente]

Thanks Scalloway for the link. I actually did come across that on my search. My problem was that it was written from the perspective of a bank in the course of its operations and not from the customer of the bank however I suppose logically they are the opposites of the same thing as both us and the bank are unpaid tax collectors when it comes to VAT, not that any VAT is due. I should have realised that.

Actually John the vast majority of the advice that I seen online said it was T9 or out of scope however I knew that Sage was set up to T2, as well as a few who said exempt, hence where my confusion arose. Indeed in one of the responses someone claimed to have spoken to HMRC who had advised that it was out of the scope and another was told in a workshop that it was exempt.

Who said tax needn't be taxing

I'm going to stick with what I had.

 

[talkinpeace]

in my lazy ex book keeper mode I used whichever sage VAT code needed to make sure they did not appear anywhere on the VAT calculation

 

[johndon68]

in my lazy ex book keeper mode I used whichever sage VAT code needed to make sure they did not appear anywhere on the VAT calculation

That would be, by default, T9.

John

 

[Searching for Perfection]

Bank charges are exempt from VAT and must be posted with T9 i.e. they will not appear on the VAT return.

 

[vivente]

Bank charges are exempt from VAT and must be posted with T9 i.e. they will not appear on the VAT return.

In that case they must be posted as T2. Exempt is T2. T9 is out of scope.

 

[johndon68]

The main thing is to remain consistent - if you use T2 keep using it, if you use T9 then likewise...

John

 

[Searching for Perfection]

In that case they must be posted as T2. Exempt is T2. T9 is out of scope.

Still they must not appear on the VAT returns and T9 is the only code for this.