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HMRC internal manual

VAT Finance Manual

Intermediaries: Corporate and other financial services: Background

Where a corporate finance deal involves a supply between two principals, a number of different businesses may be involved in assisting with the deal. They would make supplies to each, or both, of those principals. Only those businesses which make an item 5 (intermediary) supply – meeting the criteria set out in VATFIN7200 – can treat their supplies as exempt intermediary services. Their supply as an intermediary will be central to the negotiation or co- ordination of the transaction and they will be “bringing together” the principals. Their work might also include:

  • co-ordinating the work of other parties involved, e.g. lawyers, accountants etc;
  • carrying out the necessary consultations with the appropriate regulatory authorities;
  • acting as the central point of contact and execution between the sellers/issuers and their advisers and the purchasers/investors and their advisers
  • the provision of advice.

However, if the above services are not part of a supply, the predominant element of which is the provision of intermediary services, or are made in isolation they will be taxable.