VAT rules

parahandy

On a similar note to the earlier "Baby milk" thread, I got thinking...

Whenever I'm in Makro, it amazes me the difference between non-VAT and VATable items...

Such as...

Nappies - no VAT (fair enough)
Sanitary products - VAT !!!!!
Children's clothes - no VAT
Adult clothes and shoes - VAT!! (surely we all need shoes and clothes - they're not luxury products)

The Government recently undertook a big project to try and get us all on the Internet - why then do they allow VAT to be charged on it???

Sorry, this is one of my bug bears...

Allan

mcwarre

UK and government are now two mutually exclusive terms. We are ruled by an unelected quango of EU commissioners. There is now also a 'President' and a 'Foreign Minister' and an 'EU Army' - all totally illegal with no basis in law. The EU constitution was rejected by two member states and, therefore, cannot be implemented (without those two states re-voting in favour). Who do these f****rs think they are? They obviously know better than us but they wont give us that basic right to vote as they would be ejected from their unelected ivory towers. [/rant]

deanos

Im sure Orange Juice has VAT applied

mcwarre

deanos wrote:

Im sure Orange Juice has VAT applied

Too right. They were a really bad band................... (Edwin Collins was the only good (?) thing)

martindow

I believe there is a technical difference between exempted items and zero rated items. Zero rated are within the VAT scheme but as it is 0% nothing is charged - but the rate could be increased in the future. Exempt items will never be subject to VAT.

There are some odd anomalies. Safety gear for workers is mainly zero rated but steel capped wellingtons are zero and steel capped work shoes are standard rate (or vice versa). There was a famous case where the manufacturers of Jaffa cakes went to court to get them classified as chocolate covered cake (no VAT) rather than chocolate covered biscuits (17.5%). They produced a giant version in court to demonstrate how cake-like it was!
http://www.bbc.co.uk/dna/h2g2/alabaster/A528040

kscour

On the plus side
VAT is charged (or at least used to be) on childrens clothing & shoes on the continent.
And when I was still "a child" but with size 7.5 shoes:o our local shoe shop got my mum to write a brief note to the point I was fourteen with very large feet and then deducted the VAT from the bill
Unfortunately our VAT is more easier going than the EU and they are trying to pull us into line with them. And as much as there are many points I could pull the present government up on at least they are holding out on not charging VAT on childrens clothing. But the difference between what is "food" and non vatable and what is luxury and therefore liable for VAT

jessicamb

martindow wrote:

I believe there is a technical difference between exempted items and zero rated items. Zero rated are within the VAT scheme but as it is 0% nothing is charged - but the rate could be increased in the future. Exempt items will never be subject to VAT.

Yes thats correct - all to do with input VAT recovery.

If an item is subject to VAT a supplier has to both pay VAT on the relevant purchase costs and charge VAT on the finished product - if subject to VAT at 0-17.5% rates - no no effect on the supplier as the cost is passed up the supply chain to the final customer

If exempt then no input VAT is recoverable

Zippy123

If for businesses. You see, they have to pay VAT on thier sales before they get paid - if they sell on credit - which most businesses do.

This means that they have to borrow to make the payment and the tax, that is not designed to be a burden on businesses but on consumers, becomes very burdonsome as failure to pay on time is met be harsh penalities such as fines and high interest rates.

Enterprise_1701C

We have a small business and have to admit to being very annoyed that we would get heavily fined if we paid VAT (or tax) late, but they can mess around and pay anything we are due when they feel like it with no fine on them! Tax rebates take forever (even up to a year) but we get no interest and they pay no fine. Seems rather one sided to me, but the government is trying to get rid of enterprising small businesses in this country anyway, that's what it feels like.

lex

I believe VAT on sanitary products is now only at 5% (since January 2001)

There's a useless fact for you...

lex