VATFIN2720 | Money (including transfer of money) and related services: foreign exchange (forex): what businesses might be involved in forex transactions?

When forex is mentioned many people associate such an activity with a dedicated trading operation or a Money Service Business (MSB) such as a Bureau de Change, located either in a bank, a travel agent or on the high street. However, many other kinds of business deal in forex, and not just with the public. For example:

• Dedicated Market Making banks

• Other banks

• National Central Banks

• Hedge funds

• Forex brokers

• Finance Houses

• Insurance companies

• Major corporates running ‘Treasury’ operations

• Investment companies

• Pension funds

• Companies receiving customer settlement in, or, settling with overseas suppliers in non GBP currencies

• Hotels restaurants, airlines, etc

• Other

Business can conduct forex transactions as economic activities in their own right or as incidental to their main business activities. This can affect the way HMRC treats such transactions (see VATFIN2740 and VATFIN2750).

N.B. please note that this is not designed as a definitive list