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  • VAT Memo - Output tax - Rate of VAT - Reduced-rated supplies - Summary - 1110
    The following supplies are taxable at the reduced rate: Supply Reference ¶¶ Fuel and power Sch 7A Group 1 VATA 1994 ¶1116 Energy-saving materials Sch 7A Group 2 VATA 1994 ¶1136 Grant-funded: - supply and installation of heating supplies; - connection of a mains gas supply; or - security systems Sch 7A Group 3 VATA 1994 ¶1144 Woman's sanitary protection products1, 2 Sch 7A Group 4 VATA 1994 Children's car seats (including seat bases) Sch 7A Group 5 VATA 1994 Notice 701/23 ¶1156 Certain residential conversions,...
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  • VAT Memo - Output tax - Rate of VAT - Zero-rated supplies - 1180
    Although no VAT needs to be accounted for on zero-rated supplies, it is important to identify such supplies correctly because they are taxable supplies (albeit taxed at 0%). As such: - input tax can be recovered on costs relating to the zero-rated supplies; and - the supplies are taken into account when determining whether a business is liable to register for VAT. - A business which only makes zero-rated supplies can apply to be exempt from registration (¶2650). - If a business makes a combination of taxable...
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  • VAT Memo - Output tax - Rate of VAT - Zero-rated supplies - Food - Mixed supplies - 1240
    A supply of standard- and zero-rated food items, or zero-rated food items and standard-rated non-food items, together for a single price, may be a composite supply or a mixed supply (¶310). In general, the consideration should be allocated between the supplies and VAT accounted for accordingly. Areas of particular concern in relation to food items include: - packaging (¶327); - minor linked items (¶329); and - mixtures and assortments (¶331)
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  • VAT Memo - Output tax - Rate of VAT - Zero-rated supplies - Books and written material - Children's picture books and painting books - 1270
    To qualify for zero-rating, both picture and painting books must: - have several pages; - be bound, fastened, or folded concertina-style; and - be printed on paper, card, plastic or fabric, for example, a children's rag book. Children's picture books are zero-rated, unless the article is essentially a toy. Examples of standard-rated toys are: - pop-out or cut-out books, if the pop-out or cut-out part is the main part of the book (although HMRC accepts that books with at least 25% text (other than assembly instructions)...
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  • VAT Memo - Output tax - Rate of VAT - Zero-rated supplies - Drugs, medicines, aids for the disabled - 1332
    There are two broad categories falling under the heading of being medical: - dispensing of qualifying goods by a pharmacist; and - supplies of goods and services (as detailed at ¶1342) to a disabled person, or to a charity for the use of disabled persons. Such supplies are, subject to various conditions described below, zero-rated, unless they are provided by a hospital, care home or other similar institution (in which case they will usually be exempt). Disabled means chronically sick. A disabled person has...
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  • VAT Memo - Output tax - Rate of VAT - Zero-rated supplies - Supplies to charities, etc - Medicinal products - 1390
    The supply of any medicinal product is zero-rated if the supply is made to a charity providing care, medical or surgical treatment for humans or animals; or a charity undertaking medical or veterinary research. A medicinal product is defined as any product that is to be administered to humans or animals for medicinal purposes, or any ingredient in such a product. HMRC has confirmed that a supply of condoms distributed by a sexual health charity will qualify for zero-rating. However, supplies of condoms to customers...
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  • VAT Memo - Particular activities - Gold transactions - 6830
    Gold is used both for investment purposes and industrial processes. It can also be traded on the bullion markets. It is important to distinguish between these objectives, as the VAT treatment differs. 1.Investment gold is defined as either: a. gold of a purity not less than 99.5% in the form of a bar or wafer of a weight accepted by the bullion markets; b. an investment gold coin as listed by HMRC; or c. a gold coin which satisfies all the of the following criteria: - minted after 1800; - has a purity of not...
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  • VAT Memo - Particular activities - Gold transactions - Other gold - 6885
    If supplying or acquiring gold which is not investment gold, the transaction may be outside the scope of UK VAT. Except for transactions involving central banks and members of the London Bullion Market, the first issue to consider is whether the gold is allocated. “Allocated” means set apart and designated as belonging to, or reserved for, specific persons or purposes. Most commonly, allocated gold is delivered. - Gold coins which are not investment gold may qualify for the second-hand margin schemes (¶6632)....
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  • VAT Memo - Cross-border transactions - Goods within the EU - Special rules - Supplies to diplomatic missions and international organisations - 9296
    Supplies of goods (other than new means of transport (¶9112+)) to diplomatic missions, international organisations and their personnel based in other EU member states may be zero-rated if certain conditions are met. International organisations are organisations established by a treaty between sovereign states or governments. These include the European Union, United Nations and NATO but exclude: - organisations formed by agreement between non-governmental bodies, for example a charity or body representing a...
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  • VAT Memo - Cross-border transactions - Supply of services - Zero-rated services - Supplies to diplomatic missions and international organisations - 9798
    Supplies of services to diplomatic missions, international organisations (¶9296) and their personnel based in other EU member states may be zero-rated where the following conditions are met: - the supplies are either for the official use of those organisations or the private use of their personnel; and - the supplier obtains and keeps documentation to support zero-rating. A supplier who has any doubts about the documentation received should contact HMRC's National Advice Service.
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