VAT: Zero Rated vs Exempt Goods - What's the difference?

VAT Zero Rate 0% vs VAT exempt, what is the difference? If your goods are 0% rated, then how is this beneficial in comparison to being VAT exempt.......

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⏱️ Time Stamps:
1:20 - What Are Zero Rated Supplies?
2:46 - Goods & Services to EU & Non-EU Countries from the UK
3:16 - What Are Exempt Supplies?

A charge to UK VAT arises when a taxable supply of goods or services is made in the UK by a taxable person.
The term person can apply to an individual sole trader, partnership, Limited Company, LLP or any other body that supplies goods and services in the course of business.
A taxable supply is any supply of goods and services in the UK other than a supply which is specifically exempted from VAT. So a taxable supply includes standard rated (20%), reduced rated (5%) and zero rated (0%).

It's a tricky concept to get your head around, but zero rated supplies are technically a taxable supply. This can be extremely beneficial to your business if you are dealing in zero rated supplies, such as meat & poultry for example. Any VAT you incur, or input Value Added Tax, can be claimed back as your product is a taxable supply.

Exempt supplies on the other hand do not count as taxable supplies. Now if your business is supplying a combination of exempt, reduced rate, standard rate and zero rated items, it's strongly recommended you engage with an accountant you trust, as a VAT Evaluation will be extremely beneficial to your business.

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#VAT #VATexplained

[tonydCFO]

There are different rates of VAT in the UK and the most confusing is the zero rate and exempt (although the latter is not strictly a rate). The good news, if your business is making zero rated goods or services, then VAT registration could be very beneficial.

Time Stamps:
What Are Zero Rated Supplies? 1:20
Goods & Services to EU & Non-EU Countries from the UK - 2:46
What Are Exempt Supplies? 3:16

[fsxaviator]

I have a question and would really appreciate your answer.
Suppose I have open a company, register for VAT and start selling products I purchase from here, the UK, to a Non-EU country & only dealing in exports so no local clients so therefore I do not collect any VAT, can I still claim / reclaim VAT for those zero rated products I sold & exported to non-eu country?

[syedtayyab]

Hello Thanks for this video, can you please let me know if we submit voluntary disclosure to replace exempt supplies to zero rated supplies. Is there any penalty as the net VAT position will not be changed?

[shanmunir]

Love watching your videos! . Can you please answer my question
. As a director Can I pay with my personal card and get company invoice and then claim it back? My company card it’s not arrived because of the covid backlog and have to buy few things.

[stex]

I see the education sector is exempt from vat. If I'm a language tutor is this included in the exemption?

[ali.s]

U r doing it very well sir ! I Appreciate ur efforts .Respect from my side!

[martynmckail]

Hi, I know it might be a pain but please could you provide subtitles (Hard of hearing) for all your great videos, otherwise love the channel. Thanks

[RahulR-cllx]

Hi sir, Is it possible to deduct the last month refundable amount from current month VAT payable amount, Please advise me..

[ali.s]

Kindly provide some guidance on reverse charge too.

[Dino-qzbt]

It would be interesting if you could upload videos regarding new regulations, funding/grants for sole traders/directors alongside the news coming out these days. Perhaps making it a weekly/monthly thing or exclusively when such things are communicated by the gov, would be really helpful. Keep it up!

[teumae]

I'm confusing TFL is zero rated vat or exempt.Can you please tell me sir.

[mohammadrafihottak]

can you please explain margin VAT scheme and can you run standard and margin VAT scheme together?