VAT implications of On-line Loans

Offering of credit via the Internet is becoming increasingly popular. The Internet lends itself particularly well to sourcing the best deals for personal loans, mortgages, credit cards and other sources of finance for the consumer. Often, on-line middlemen, who search and maintain a database of the cheapest and best deals available, provide these services.

The VAT issues revolve around whether the services provided by these middlemen are advertising, introductory or intermediary services on behalf of the underlying financial institution that actually provides the credit. Vendors should exercise great care that they are not caught out by the “tainting” provisions of the credit management terminology under UK legislation.