VAT, fintech and the payment transfer exemption

The payments market continues to evolve in response to technological developments and changes in consumer behaviour. ‘Buy now, pay later’ offerings have soared in use, and while consumers may think it’s just another payments service, the terms entered into between the parties suggest otherwise, leading to potential VAT issues. Online platforms have also begun offering virtual currencies. It remains to be confirmed whether they are in currencies in name only, but this and both platform/user and user/user transactions also require further consideration for VAT purposes. This against a backdrop of the UK and EU reviews of the financial services exemption suggests further technical change will follow.