why is betting VAT exempt

WorzelG

Some confusion here.

zero rated and exempt supplies are different.

If the only sales you make are exempt you cannot claim any VAT on your purchases, if they are zero rated however you can claim it all back. If there is a mixture of exempt and vatable a partial exemption may apply.

Kronkston_2

What's the point in claiming nothing back?

JasonLVC

nedmundo wrote: »

Sorry, but that is complete and utter bullocks.:rotfl:

What bit of it is utter bullocks nedmundo?

Perhaps you'd like to comment on this Court case :-

http://www.scotcourts.gov.uk/opinions/2007CSIH58.html

and the guidance as published by HMRC on floor area apportionment methods of partial exemption in relation to Opticians :-

http://www.hmrc.gov.uk/manuals/pemanual/PE3350.htm

If you mean the size of the eye-test area isn't small just for VAT purposes then fair enough, but it is a contributory reason in my experience of dealing with Opticians and VAT. If you mean my entire comment was bullocks then I'd have to disagree with you at both a technical and legal level.

JasonLVC

Kronkston wrote: »

What's the point in claiming nothing back?

I think what Worzel meant was :-

If you make an exempt sale you do not charfge VAT on your sale and you cannot reclaim any VAT on any purchases you make.

If you make a zero rated sale, you charge VAT but at 0% so it doesn't affect the selling price but VAT has been "charged" and so you can then claim back any VAT on your purchases.

Example. A bank makes exempt sales, when they get their gas bill, they cannot reclaim the VAT on those bills. Mothercare sells baby clothes which are zero rated and when they get their gas bill they can reclaim the VAT on it, thus reducing the true cost of that gas bill to Mothercare.

nedmundo

JasonLVC wrote: »

What bit of it is utter bullocks nedmundo?

Perhaps you'd like to comment on this Court case :-

http://www.scotcourts.gov.uk/opinions/2007CSIH58.html

and the guidance as published by HMRC on floor area apportionment methods of partial exemption in relation to Opticians :-

http://www.hmrc.gov.uk/manuals/pemanual/PE3350.htm

If you mean the size of the eye-test area isn't small just for VAT purposes then fair enough, but it is a contributory reason in my experience of dealing with Opticians and VAT. If you mean my entire comment was bullocks then I'd have to disagree with you at both a technical and legal level.

The link you provide is where the Appellant actually won an appeal and Opticians work by the deminimis rule with regards to claiming VAT back on supplies for retail sale and professional services. The proportion of VAT exemption on optical goods varies from practice to practice according to the overheads in producing the product and the amount of cross-subsidy required to fund the professional service aspect. Floor space may be a factor, but I've never know a testing room to be designed to make a practice more VAT efficient.

JasonLVC

nedmundo wrote: »

The link you provide is where the Appellant actually won an appeal and Opticians work by the deminimis rule with regards to claiming VAT back on supplies for retail sale and professional services. The proportion of VAT exemption on optical goods varies from practice to practice according to the overheads in producing the product and the amount of cross-subsidy required to fund the professional service aspect. Floor space may be a factor, but I've never know a testing room to be designed to make a practice more VAT efficient.

The appeal was not 'won' it was referred back for further review, I could link you to loads more current ones but for time. Since 2007, we've had Scrivens, D&A and whole raft of indies challenged by HMRC. If you are in involved with the likes of FODO then they'll have the most up-to-date tribunal outcomes I'm sure.

But at least I see we've gone from 'utter bullocks' to acceptance that floor space 'may' be a factor (with the caveat that you've never known a testing room to be designed to make the practice more VAT efficient).

Before full cost apportionments (FCA) methods which have been the rage for some years now, we had floor space based partial exemption methods. This is where the 'small room' logic came from, as opticians moved over to FCA the floor area used become less important.
...and thank you for responding, but can we now move on from this and back on topic?:beer:

nedmundo

With pleasure! Thanks - nice to see someone back up their point of view. Cheers!