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Neither the VAT Act 1994, Schedule 9, Group 5, nor the VAT directive defines what is meant by the term ‘credit�. Section 9(1) of the Consumer Credit Act 1974 (as amended) gives credit the following meaning ‘a cash loan, and any other form of financial accommodation.� Generally we see the term ‘credit� as applying to:

• personal loans
• cash loans
• overdrafts
• mortgages (personal and commercial)
• hire purchase
• credit sale
• conditional sale
• credit cards (including affinity cards) and
• deferred payments

The provision of credit is usually associated with banks, building societies and finance houses. However, it is now increasingly available through a range of different outlets (e.g. supermarkets and high street stores) to encourage trade and to provide a total service (a ‘one-stop shop�).

These sections cover various types of credit arrangements such as:

• personal loans, cash loans, overdrafts, mortgages and interest on deposits (see VATFIN3110)
• credit supplied with goods or services - hire purchase, conditional sale and credit sale (see VATFIN3120)
• separate charges for credit (see VATFIN3125)
• credit cards and other types of payment card (see VATFIN3140 to VATFIN3150)
• deferred payments (see VATFIN3170) and
• pawnbroking (see VATFIN3180).

The above sections look at the law relating to credit, consider the liability and draw on case precedent. They also look at:

• the services of intermediaries (see VATFIN3130) and
• outsourcing (see VATFIN3135).

Topics not covered by these sections

The following topics are only covered in . You should read the relevant paragraphs for guidance on liability:

• returned or repossessed goods (sub-paragraph 4.3);
• what supplies are not considered exempt credit (paragraph 4.4); and
• credit management services (paragraph 4.10).