Commentary

V7.327 Basic principles of exempt supplies

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.327 Basic principles of exempt supplies

Part V7 Tax planning | Commentary

V7.327 Basic principles of exempt supplies

The goods or services that qualify VAT for VAT exemption are listed under various group headings within the VATA 1994, Sch 9. See V7.328.

As explained above, a business that only makes exempt supplies is not a taxable person under UK law and cannot register for VAT. However, many large businesses that make exempt supplies also make some taxable supplies, and therefore have an obligation to register for VAT if the value of these taxable supplies exceeds the current VAT registration limits. The business will then be partly exempt with an input tax restriction on its expenditure. See Example 1.

Note – under UK law (VATA 1994, s 3(1)) the term 'Taxable Person' means a person who is, or is required to be registered for VAT under the Act. Compare this with the definition of a taxable person

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