[væt ɪɡˈzɛmpt]
VAT Exempt describes certain items that VAT does not apply to. Self-employed individuals providing VAT exempt goods cannot recover VAT spent on their expenses.
VAt Exempt describes certain items that VAT does not apply to.
VAT stands for Value Added Tax and is Tax added to most goods and services sold by VAT-registered companies. Companies must register for VAT if their total VAT taxable turnover was over £85,000 for the last twelve months. The standard rate of VAT is 20% for the 2023/24 Tax Year.
Educational and training services, finance, subscriptions to membership organisations and fundraising events by charities are all examples of VAT Exempt goods and services.
Self-employed individuals that provide VAT exempt goods and services don't need to register for VAT even if their total VAT taxable turnover is above the VAT threshold. These individuals can also not recover any VAT they have spent on their purchases or Expenses.
Zero-rated items are still subject to VAT but the VAT rate is 0%. These are different to VAT Exempt items as the seller has the ability to reclaim VAT paid on the costs of producing the items.
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