The following Tax practice note provides comprehensive and up to date legal information covering:
A transaction must have five elements for UK VAT to be chargeable. It must:
be a supply of goods or a supply of services
be a taxable supply
take place in the UK
be made by a taxable person, and
be made in the course or furtherance of any business carried on by that person
This Practice Note explains what each of those five elements means.
This Practice Note does not cover importation of goods or the circumstances where a UK person may be required to pay UK VAT on the supply of services from abroad, ie the reverse charge, for which see Practice Notes: VAT—the reverse charge on cross-border supplies and Importing goods from outside the EU.
This Practice Note includes references to EU Directives and case law; for information on the ongoing significance of EU Directives, and of judgments of the Court of Justice for the UK’s VAT rules, see Practice Note: Brexit and tax—the continued application of EU law.
The first element has three parts. A transaction must:
be a ‘supply’
be categorised as either a ‘supply of goods’ or a ‘supply of services’, and
not be specifically excluded from being a supply
The term ‘supply’:
includes ‘all forms of supply’, but
excludes anything done ‘otherwise than for a consideration’
HMRC provides some guidance:
'…a supply may be effected by
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