Are these cakes standard rated or zero rated ?
Hi, Could I call on your wisdom please to help me understand this VAT issue.
I have a client who makes decorated cakes.
He sells the cakes to a company who then gift them to their employees or customers.
After studying schedule 8 I came to the conclusion that the cakes are zero rated which would allow my client to register for VAT and reclaim input tax whilst not charging output tax.
However he has been told by another accountant that supply of these cakes would be standard rated, a point of view which I don't understand.
From my understanding this supply is not in the course of catering - unless I'm missing something. Could any of you learned people help me please ? because I'm confused.
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