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Zero-Rated

   Also found in: Dictionary/thesaurus, Encyclopedia, Wikipedia 0.01 sec.
Zero-Rated
Goods and services that are not subject to a VAT. Examples of potentially zero-rated goods and services include financial services and items donated to a charity that the charity later sells.


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This should not affect genuine businesses as a zero-rated supply is still a taxable supply so, although no VAT is charged, the seller can generally reclaim VAT on purchases that relate to those sales," said Hannah Dobson, director at consultancy Smith & Williamson.
A zero-rated business does not collect VAT on sales but is compensated for any input VAT it pays.
Some examples of zero-rated or exempt goods and services are: children''s clothes, food, public transport, newspapers, medicines, books, insurance, postal services and funerals.
 
 
 
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