Zero-rated, reduced rated and exempt supplies and what our New Government has to say!

Zero rated VAT: Goods and services that are zero-rated are still VAT-taxable, but the rate of VAT is 0%. This means that while no VAT is charged to the customer. An example of zero-rated supplies are Children’s clothing’s and their footwear.

Reduced rated VAT: Some goods and services are charged VAT at a reduced rate of 5% in the UK. An example of reduced rate supplies would be woman sanitary protection products.

Exempt: If a good or service is exempt, no VAT is charged to the customer and the supplier cannot reclaim VAT on their expenses related to these goods or services. An example is physical education and sports activities.

If any government wished to increase the VAT yield, it could withdraw many of these reduced rates, however the labour party has stated its intention to withdraw the exemption for education fees in private schools.

WIM Accountants are here to help businesses with their accounting and taxation needs.

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