Chapter 3 - Liability of the Supply

Question 1

Introduction

Answer 1

Three types of supply:

• taxable supply
• exempt supply
• outside the scope

Question 2

Taxable Supplies

Answer 2

Three types:

• standard rate - 20%
• reduced rate - 5%
• zero rate - 0%

Question 3

Reduced Rate

Answer 3

In Schedule 7A of VATA 1994 - 13 groups. Look at the leg.

Question 4

Reduced Rate Groups

Answer 4

1) Domestic fuel and power
2) Energy saving material installations
3) Grant funded installation of heating equip, security goods, or connection of gas supply
4) Women’s sanitary products
5) Kid’s car seats
6) Residential conversions
7) Residential renovations and alternations
8) Contraceptive products
9) Welfare advice and info
10) Mobility aid installation for the elderly
11) Smoking cessation products
12) Certain caravans
13) Cable-suspended passenger transport systems

Question 5

Outside the Scope of VAT

Answer 5

No VAT is due on things like:

• Salaries
• Tips
• Intra-group transactions if there’s a VAT group
• Sale of a business as a going concern
• Supplies that take place wholly outside the UK