VAT Partial Exemption Question

T.C.

Does anyone know if mortgage interest payments should be treated as exempt supplies for the purposes of the partial exemption method or whether they can be ignored. I have searched HMRC website but cannot find a definitive list. Help appreciated.

Poodle

Hi TC,

Finance charges are exempt from VAT as per schedule 9 http://www.opsi.gov.uk/acts/acts1994/ukpga_19940023_en_1
And that would imply that, yes they should be included in your calculations, interest only mind not any capital repayment element.

However, to be honest, I am not 100% sure, have you tried the MIP business support helpline?

Let us know if you find the answer