Commentary

V7.330 Zero and reduced rating—introduction

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.330 Zero and reduced rating—introduction

Part V7 Tax planning | Commentary

Zero-rated and reduced-rated outputs

V7.330 Zero and reduced rating—introduction

If a supply is zero-rated, then tax is still chargeable – but at 0%. Therefore, a zero-rated supply is still a taxable supply, and, importantly, input tax is reclaimable on costs related to the supply. This means that a business making wholly zero-rated supplies will have no output tax to pay on its VAT returns – but will be able to recover input tax on costs and overheads it incurs in the business.

If a business is in a repayment situation on a regular basis, it has the option to

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial