»Ê¹ÚÌåÓýapp

Businesses can raise finance by selling any amounts owing to them (their debts). »Ê¹ÚÌåÓýapp business is therefore relieved of the debt and of the collection of any monies outstanding under that debt.

»Ê¹ÚÌåÓýappse sections deal with:

• a sale of a debt - see VATFIN3215
• assignment of a debt - see VATFIN3215
• factoring (including invoice discounting and block discounting) - see VATFIN3220
• block discounting - see VATFIN3225
• asset based lending - see VATFIN3230
• forfaiting - see VATFIN3235
• securitisation - see VATFIN3240
• debt consolidation - see VATFIN3245
• debt negotiation services - see VATFIN3250
• debt collection services - see VATFIN3255 and
• insolvency practitioner services - see VATFIN3260.

This section will assist you in understanding what is meant by the above terms and deciding the liability of these supplies. In each case it is important to identify:

• what is being supplied
• the consideration for the supply and
• the direction of the supply or supplies.

Topics not covered in these sections

»Ê¹ÚÌåÓýapp following topics are only covered in VAT Notice 701/49 Finance. You should read the relevant paragraphs for guidance on liability:

• factoring and partial exemption (paragraph 5.6)
• factoring and bad debt relief (paragraph 5.7)
• factoring and cash accounting (paragraph 5.8).