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  • VAT Memo - Scope of VAT - Exempt supplies - Summary - 352
    The list of exempt supplies is contained in statute, with the most common ones being as follows: Supply Comment ¶¶ Land Complex exceptions apply ¶5100+ Finance Includes dealing with money, credit facilities and consequent administrative requirements ¶356+ Cultural services Includes admission to museums, galleries, etc, and theatrical/musical performances supplied by public bodies and non-profit-making bodies ¶384+ Charity fundraising events Includes admission charges, and related goods and services ¶392+...
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  • VAT Memo - Scope of VAT - Exempt supplies - Common exemptions - Finance - Management of special investment funds - Meaning of “management” - 378
    Exempt fund management covers the following key activities: - assessment of financial and investment risk; - making decisions regarding investments, including purchase and disposal; and - involvement in the property held by the fund. Other peripheral activities which qualify for exemption include the following (provided that they are subsumed into a single composite supply (¶310+) of fund management services): - legal and fund management accounting services; - dealing with customer queries; - value and pricing...
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  • VAT Memo - Scope of VAT - Exempt supplies - Common exemptions - Education and sporting services - Sporting and physical education services - Competition entry fees - 420
    The grant of a right to enter a competition in a sporting activity or physical recreation is exempt from VAT where: - the consideration to enter is in money and the total amount of the entry fees is put towards a prize for that competition; or - the right to enter is granted by an eligible body. If the entry fee includes the body's normal fee for admission to its grounds or facilities, that part is not exempt. If the fee is a composite supply (¶310+), it may still all be exempt but otherwise an apportionment...
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  • VAT Memo - Scope of VAT - Exempt supplies - Other exemptions - 458
    Exemption also applies to the following less common types of supply: - antiques from historic houses (¶460); - betting, gaming and lotteries (¶462+); - burial and cremation (¶468+); - postal services (¶474); and - subscriptions to public interest bodies (¶476+).
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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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