912. Meanings of 'exempt supply' and 'exempt acquisition'.

A supply of goods or services is an 'exempt supply' if it is of a description for the time being specified in Schedule 9 to the Value Added Tax Act 1994; and an acquisition of goods from another member state1 is an 'exempt acquisition' if the goods are acquired in pursuance of an exempt supply2. Examples of the exempt supplies specified in Schedule 9 include education, land, health and welfare, insurance, and works of art3.

VAT is not chargeable on exempt supplies4. A supplier is not, therefore, entitled to credit for the input tax