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HMRC internal manual

VAT Finance Manual

Money (including transfer of money) and related services: examples of services and products falling within item1: payment services for household bills

Several organisations offer over-the-counter bill payment services - either directly or through a corner shop network. The public presents utility, council tax and other bills, with payment, at the counter. Payments are accepted, collated and passed to the appropriate company. Such services can be funded by a charge to the receiving company or a charge to the member of the public using the service. In either case the business offers a service and is exempt under item 1.

Payments made by a collecting organisation to retailers in the corner shop network are also exempt. They are payment for exempt supplies of services by the retailer to the collecting organisation.

New products for bills payment are developing all the time. In future, they may contain greater taxable elements - such as providing management information, advisory services or hardware. If you have any doubts about a new product, please contact the Financial & Commodities VAT UoE for advice.