Loan repayments and interest. Are they Zero VAT or not applicable?

Question asked by cristina serra ruiz 10 years ago

Hi

Is a loan repayment and loan interest "0 VAT" or "don't include in the VAT return"?

Thank you! Cristina

1 Reply

Hi Cristina - the actual loan repayment is outside the scope of VAT, so it doesn't appear on the VAT return.

The interest is Exempt from VAT and I have always included this in box 7 of the return (assuming you are paying rather than receiving interest) by using 0%, as box 7 should include all purchases & expenses.

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