What is the difference between no VAT and exempt?
The main difference between zero rate and exempt supplies is that the suppliers of zero-rated goods and / or services can still reclaim all their input VAT, but the suppliers of exempt goods are either not registered for VAT or if they are, they cannot reclaim their input VAT.
Are rates exempt from VAT?
Some things are exempt from VAT , eg postage stamps, financial and property transactions. The VAT rate businesses charge depends on their goods and services.
Do you pay VAT on wages?
Can VAT be payable on employees’ salaries? Taking on an employee means you’ll also take on a stack of other responsibilities as their boss. But at least you won’t have to pay VAT on their salaries as you would if they were contractors.
What items are exempt from VAT?
These include children’s clothing, books and magazines, and goods sold in charity shops which have been donated by members of the public. There are several quirks in the VAT system. For example, biscuits incur VAT at the full rate but cakes are exempt; and potato crisps incur 20% VAT but corn-based snacks are VAT-free.