Table of Contents
What items are excluded from VAT?
Items that are VAT exempt in the UK
- Some food and drink. Most food and drink for human consumption is VAT exempt, but there are some important exceptions.
- Children’s clothes.
- Publications.
- Some medical supplies and equipment.
- Charity shop goods.
- Antiques.
- Some admission charges.
- Gambling.
What is VAT not applicable?
goods or services you buy and use outside the UK. statutory fees – like the London congestion charge. goods you sell as part of a hobby – like stamps from a collection. donations to a charity – if given without receiving anything in return.
What services are VAT free?
There are some goods and services on which VAT is not charged, including: insurance, finance and credit. education and training. fundraising events by charities.
Which service is exempt from VAT?
Examples of exempt items include the provision of insurance, postage stamps and health services provided by doctors. Supplies that are ‘outside the scope’ of the UK VAT system altogether. These supplies are beyond the realm of the UK VAT system and you cannot charge or reclaim VAT on these supplies.
Can you avoid paying VAT?
If you happen to offer a variety of products or services which are distinctly different, you may be able to avoid passing the VAT threshold by chopping up your business into smaller businesses that handle one product or service each. Each business operates under the VAT registration threshold. No need to register.
Do you pay VAT on services?
VAT is short for ‘Value Added Tax’, and is charged on most sales of goods and services in the UK. When your business makes sales, you don’t charge VAT to your customers unless you’re registered with HMRC to do so.
What goods and services are exempt from VAT?
What is the difference between exempt and zero rated VAT?
Zero-rated items are goods on which the Government charge VAT but the rate is currently set to zero. Exempt items are goods on which no VAT is paid or charged, but which still need to be recorded on the VAT Return.
Can I have 2 businesses to avoid VAT?
Each business operates under the VAT registration threshold. No need to register. HMRC are more likely to take the view that two businesses are separate if both have their own separate bank accounts. They should be separately registered with HMRC and submitting their own tax returns separately.
What is an example of a zero rated supply?
Examples of items that may be zero-rated include certain foods and beverages, exported goods, donated goods sold by charity shops, equipment for the disabled, prescription medications, water, and sewage services, books and other printed publications, and children’s clothing.