Taxman fails in attempt to charge Scottish banks for issuing notes
Reading time: 1 minute
HM Revenue & Customs has failed in its attempt to introduce VAT payments for the supply of bank notes in a move that would have seen Scottish banks charged for issuing their own.
As one of the three banks in Scotland that are legally authorised to issue notes, alongside Bank of Scotland and Royal Bank of Scotland, Clydesdale Bank challenged the taxman’s move at the First Tier Tax Tribunal in Edinburgh.
Since 1973 an agreement has been in place whereby the banks qualify for zero VAT on supplying banknotes.
However, in 2016 HMRC said that the exemption would only apply to the first issue of banknotes and not those which had been returned and were issued for a second or subsequent time through staff or cash machines.
The tribunal ruled that the zero rating should apply not just to the original production of notes, but every subsequent issue.
HMRC said: “We are carefully considering the judgment.”
Clydesdale has not issued a statement.
Share this article:
Subscribe to our newsletter to not miss articles like this one:
SUBSCRIBE
