Market leading insight for tax experts
View online issue

The taxation of receivables finance transactions

Matthew Mortimer and Emma Noehrbass (Mayer Brown) consider some important tax treatments that can apply to receivables finance transactions.

Receivables finance transactions come in many different forms but for current purposes can be assumed to include the following features (see also the example below):

  • A trading company sells goods or services to its customers and is entitled to be paid for those goods and services at a later date.
  • To raise finance that it needs in its everyday business the trading company sells the resultant receivables to a financier say a bank or a so-called factor.
  • The trading company makes that sale at a discount to the face value of the receivables which will generally represent the financier’s remuneration for participating in the transaction.
  • In turn the financier will hope to receive the face value of the receivables from the customers and may have no...

If you or your firm subscribes to Taxjournal.com, please click the login box below:

If you do not subscribe but are a registered user, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this article in full.
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
EDITOR'S PICKstar
Top