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Granting and managing credit

VAT exemption applies to the service of granting credit and making advances. Examples of exempt activities include advancing loans and providing overdraft facilities.

Exemption can also extend to the provision of credit by a business in connection with goods or services it is supplying. However, for exemption to apply there must be a separate charge for the credit which is disclosed to the recipient of the supply of goods or services.

The management of credit by the person granting it is exempt. However, where the management is outsourced to another person exemption does not normally apply (although see further below).