Commentary

V7.337 Zero and reduced rating—planning points to consider

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.337 Zero and reduced rating—planning points to consider

Part V7 Tax planning | Commentary

V7.337 Zero and reduced rating—planning points to consider

The following planning points should be given consideration.

  1.  

    •     A business making wholly or mainly zero-rated supplies will almost certainly benefit from registering for VAT on a voluntary basis if its taxable turnover is less than the compulsory registration limits.

  2.  

    •     If a business makes both standard-rated and zero-rated sales, it is imperative that systems and procedures are in place to correctly record the correct amount of output tax.

  3.  

    •     VAT incorrectly charged to a customer on a zero-rated item will produce reduced profits for the customer if it makes some exempt

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