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What is VATable

OK - I know it is a ridiculous question and I apologies for putting "VAT" and "simple" in the same sentence.

However, it runs in my mind that there is such a shet avaialble somewhere that can be a starting point for discussions in this area.

Many thanks to any who respond.

ian mcgregor


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17th Oct 2008 12:53

nice idea, Ian.....
...and various attempts available.
But a one pager ultimately can't scratch the surface of the surface I'm afraid.

Don't forget we needed the House of Lords to decide if a jaffa cake was vatable (or rather, what rate was assessable). Their judgement was a lot more than one page. That's over one jaffa cake. Same thing over Pringles. That's over one crisp. Er, or was it....

But putting "VAT" and "simple" in the sentence is exactly what happened when the tax was first introduced in the '70s when we were all assured (by politicians!!) it was essentially a simple tax.

(p.s. I wholly agree with David that the best place to start is assume that everything is Vatable. And then the fun starts)

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17th Oct 2008 11:54

Everything - unless it isn't
There isn't anything like that available, becuase so much of VAT is based on the circumstances of the supply. There used to be a notice that attempted something broadly like this issued by HMCE but that went over 20 years ago.

The starting point is this: VAT is levied on all transactions made in the UK, for a consideration, by a taxable person acting in the course or futherance of their business, unless specifically zero rated, exempted, or reduced rated by legislation.

On top of that some transactions are automatically deemed to be supplies such as the private use of business goods, the retention of stock/assets when you deregister etc.

So before you even look at liability you need to see whether the supply is in the UK, whether there is a consideration, and whether it's in the course of business.

Consideration covers barter as well as currency, and a supply can be refraining from doing something as well as actually doing something!

A very basic starting point would be to assume that all business supplies are taxable except items found in Schedules 7A to 9 of the VAT Act i.e.

Zero Rated (Sch 8):
Bank notes, Books and printed matter., Residential Caravans and houseboats, Certain supplies to Charities etc., Childrens and safety Clothing and footwear, Construction of residential buildings etc.,Drugs, medicines, aids for the handicapped etc., Food (except catering/confectionary), Investment Gold, Imports, exports etc., International services, Alterations to Protected buildings, Sewerage services and water, Talking books for the blind and handicapped and wireless sets for the blind, Tax-free shops, Passenger and International Transport.

Exempt (Sch 9):
Betting, gaming and lotteries, Burial and cremation, Education,
Finance, Fund raising events by charities and other qualifying bodies,
Health and welfare, Insurance, Land, Postal services (supplied by the Post Office), Sport, sports competitions and physical education, Trade unions and professional bodies, Works of art etc

Reduced RAte (Sch 7A):
Smoking Cessation products, Childrens Car Seats, Fuel and Power (domestic), Regeneration of dwellings, Conversions to dwellings, Contraceptive Products.

All of the above have various exceptions, and some have exceptions to the exceptions. Many rely on the status of the provider i.e non-profit making organisation, individual rather than limited company, public body. Some even rely on the status of the customer.

I'm not sure what discussions you're looking to start in this area, but the simple and least satisfying answer is that heading this spiel: VAT is on everything - unless it isn't

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