VATFIN2230 - Money (including transfer of money) and related services: interpreting item 1: what is meant by 鈥榓ny note or order for the payment of money鈥�

A note for the payment of money is a banknote. An order can include postal orders, giros and cheques etc., but can be as informal as an 鈥業OU鈥�. You should, however, check that there is a supply for VAT purposes in the first place, before deciding on the liability (see VATSC03200). 皇冠体育app actual price paid is the consideration for the supply and amounts payable on redemption remain outside the scope of VAT.

An example of a supply of an 鈥榦rder for the payment of money鈥� is where a building society charges its customer a fee for withdrawing funds by cheque. This fee is consideration for an exempt supply under item 1. 皇冠体育appre is no such exempt supply when a customer writes a cheque in return for goods or services because the payment is consideration for the goods or services.

皇冠体育app issue here is whether money (or notes representing money) is itself a supply for VAT purposes or whether it is consideration for a supply. If the building society charged its customer a fee for the cheque and the cheque was made out to a retailer as payment for goods, there would be

  1. a supply of issuing an order for money by the building society (exempt) and
  2. consideration to the retailer (for a taxable supply of goods).

皇冠体育app customer is not making a supply by paying for the goods.