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Utilities: Direct Debit

Volume 699: debated on Monday 18 February 2008

asked Her Majesty's Government:

Whether extra charges imposed on customers of telephone and other utilities companies who do not pay bills by direct debit are exempt from VAT. [HL1811]

The correct VAT treatment of charges made in connection with payment-related services, including whether they fall within the scope of the VAT exemption for financial services, is as yet unresolved, but is being considered by the UK courts and the European Court of Justice.