10 odd VAT rules - with a Christmas twist
Posted on 10th December 2020
It’s ironic that VAT was introduced as a ‘simple tax on the supply of goods and services’ because it is now known to most as one of the most complicated areas of tax – I’m sure the vast majority of UK business owners will agree!
To make light of the fact, here’s some of the weirdest VAT rules in existence – with a special Christmas twist…
The 10 weirdest VAT rules we know about...
1. The sale of a live turkey is standard rated. However, the sale of a dead one (for your Christmas dinner) is zero rated. Poor turkey.
2. A downloaded (i.e. eBook) version of the Bible is standard rated, however a printed copy is zero rated. Jesus wept!
3. Hosting a festive get together? If you buy nuts in shells for your guests to nibble on, you won’t be paying VAT because they’re still in their ‘natural state’. Deshelled peanuts, however, are standard rated as they’ve been shelled. Nuts, isn’t it?
4. Having caviar with your prawn cocktail starter on Christmas day? You’re free of VAT, as the taxman rules caviar as a necessity, of course...
5. …but you will be paying the standard rate on the orange juice you use for your Bucks Fizz, as it is considered a luxury item. Obviously.
6. Your Champagne is standard rated, as is all booze…
7. …except for when it's in food, such as your brandy-soaked Christmas pudding. Mmm.
8. Can’t resist a gingerbread man? No VAT is charged if he has two chocolate spots for his eyes, but any other chocolate-based additions - such as buttons on his outfit - means VAT is payable, because then he's technically considered a luxury item.
9. Buying a Christmas tree? Real ones in pots are VAT free. An artificial tree will be VAT-able (yep, that's the technical term).
10. Finally, we hope that you don’t have any family arguments on Christmas day – although it’s kind of tradition, isn’t it? It’s worth knowing, just in case it gets a bit too heated, that buying a coffin is standard rated but hiring a hearse is VAT free.
And on that jolly note, we’d like to wish you a very Merry Christmas, and a happy new year!
Written by
Nicola J Sorrell
- Effective Accounting
Founder | Xero Champion | IR35 Expert
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