Exemption of certain goods and services is described as a ‘VAT relief’: in many cases the intention underlying the law is to reduce the cost of selected types of ‘essential’ supply to the public (healthcare education etc). However the way the rules operate is not always so beneficial to the businesses that have to put them into practice. This article reviews some of the quirky outcomes I have come across recently.
Strictly
In some other taxes reliefs are there to be claimed: you can choose whether you want them and if you fail to file at the right time you have missed out. VAT exemptions are mandatory: if a supply meets the definition in the law it is exempt and if you have accounted for VAT on it you have made a mistake. That may entitle you to claim output...
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