Banks Add no Value?

[rustybin]

It occured to me t'other day that one never recieves a VAT receipt from a bank. I gather that this is because fees for handling money are not VATable. Why is this? Shirley the Revenue are not trying to imply that banks provide no value to their customers? The cynic within me would imagine it is because most ex-chancellors head off to the city afterwards to get a nice load of non-exec directorships and so don't want to annoy the banks but I am sure that couldn't possibly be true.

[Eric Mc]

Most financial charges are specifically excluded from VAT (although provision of financial services isn't).

Esserntially income generated from moving money around is excluded from the VAT system.