VAT expert Neil Warren examines the VAT minefield from zero rating to exemptions, to outside the scope, highlighting the complexity of the current VAT rules for businesses and illustrates various VAT treatments using practical examples
I always get accountants who ring me up to talk about a VAT problem and the conversation will proceed along the following lines:
‘We’ve got a client who does building work on new houses, which is exempt from VAT’, they will say. ‘You mean zero-rated?’ I interrupt. ‘Oh yes … well it’s the same thing, they don’t charge 20% VAT on their work is what I mean.’
Or another conversation might go this way:
‘We’ve got a client who is doing some management consultancy work for a business in Holland, which is zero-rated under the B2B rule’, says the accountant.
‘You mean outside the scope of UK VAT’, I reply. ‘Management consultancy services are standard rated but the place of supply is the customer’s country in this situation – hence there is no UK VAT charge’.
The dif
