Wondered if anyone could help me out if possible.
I am trying to identify whether there is a listing of industries or organisations (types) who are unable to reclaim VAT which they may have paid for products or services in the UK?
I would be grateful for any help and assistance with this matter.
Also is there anything in the HMRC website which will help in this search for information?
Best wishes
Mike
Replies (5)
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Taxable Supplies
To reclaim VAT you must be making taxable supplies. Some business are exempt for VAT
http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm#5
Charities are the area I am most familiar with. They use donations and grants to provide goods and services so cannot reclaim VAT.
Exempt/Out of Scope and ESCs
Hi Mike
Generally, if the organisation is carrying out an exempt activity, then it can't reclaim the VAT relating to that activity. http://www.hmrc.gov.uk/vat/forms-rates/rates/trade-sectors.htm gives a very general overview of the sectors that might have special VAT rules.
However, even in the NHS and Local Authorities (the areas I'm most familiar with) not all of their activity is VAT exempt. Also, much of the NHS also operates under the "Contracted Out Services" extra statutory concession, just to further complicate matters.
State schools generally come under their local authority for VAT purposes, but obviously most of their activities are educational and out of scope for VAT.
Universities are another whole VAT area unto themselves, but much of their input VAT is irrecoverable.
Louise
Not registered?
If your client isn't registered for UK VAT, then they aren't going to be able to charge UK VAT.
Also, if the goods are zero-rated for VAT, then there won't be any VAT payable on import. (You might need to check the exact nature of your client's goods - most, but not all, printed matter is zero-rated).
Have a look at this, to see if it would be zero-rated:
http://www.hmrc.gov.uk/manuals/vbooksmanual/Index.htm (which covers what items are eligible here: http://www.hmrc.gov.uk/manuals/vbooksmanual/VBOOKS3000.htm )
and as some background (as I appreciate, your client won't be the ones doing the actual importing):
Louise