Industry sector: Business services


Independent financial advisers and VAT

Financial services supplied by intermediaries are normally exempt from VAT so long as any financial advice is given as part of arranging the client's purchase of a financial product. Businesses whose activities consist only of exempt supplies cannot register for VAT and cannot recover any VAT on purchases of goods and services to be used in making those exempt supplies.

However, if you offer financial advice only, or offer services such as workplace personal pension consultancy services to employers, or taxation advice and financial health checks, then these would be standard rated for VAT purposes. Your business would have to charge VAT on them if it was registered for VAT.

Making Tax Digital (MTD) for VAT

Under HMRC's Making Tax Digital initiative, VAT-registered businesses with taxable turnover above the VAT threshold must keep records digitally and use special software to submit their VAT returns. You can find out more about MTD on the website.

Further information

The position can be complex and you can contact the VAT Helpline on 0300 200 3700 for guidance if you need it. The website includes several helpful HMRC leaflets, including VAT Notice 700/1 Should I be Registered for VAT? and Notice 701/49 Finance.