Outputs are sales, and output tax is VAT due on sales. The standard VAT rate is 20%, which applies to most supplies of goods or services. There are also some sales with are chargeable at the reduced rate (5%), or the zero rate (0%). Other services are exempt from VAT.
The principle is that unless your supplies are explicitly listed, they will be standard rated. The difference can of course be significant. This means it is imperative to determine if your supplies are not standard rated.
The following is the list of zero rated items:
|Bank notes||Food||Clothing & footwear|
|Construction of buildings||Transport||Tax-free shops|
|Taking books for the blind and handicapped & wireless set for the blind||Caravans & houseboats||Sewerage Services & water|
|Gold||Drugs, medicines & Reliefs for people with disabilities||Protected Buildings|
You should note that, for each item, therefore are various exclusions. This means that, for example, not every supply of food is zero rated. But a supply of food may be zero rated if it is not excluded from zero rating. The same applies to all the other categories.
The following is the list of reduced rated items:
|Residential conversions||Domestic fuel & power||Smoking cessation products|
|Welfare advice & information||Installation of energy-saving materials||Caravans|
|Residential renovations and alterations||Women’s sanitary products||Contraceptive products|
|Mobility aids for the elderly||Grant funded installation of heating equipment, security goods, connection of gas supply||Children’s car seats|
The following is the list of exempt items:
|Sports, sports competitions & physical education||Burial & cremation||Health & welfare|
|Land||Works of art||Fund raising events by charities & qualifying bodies|
|Cultural services||Education||Postal services|
|Betting, gaming, and lotteries||Supplies of goods where input tax cannot be claimed||Subscriptions to trade unions, professional and other public interest bodies|
If your supplies are exempt, then you cannot claim VAT back. The value of such supplies is also excluding when determining your turnover for registration purposes.