TAXABLE SUPPLIES
HMRC indicate that the VAT Act 1994 section 4(2) provides that a taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply.
This means that taxable supplies are all goods or services sold which are not within the exempt items or items outside the scope of VAT, never minding who the seller is. So, all goods or services which are subject to VAT at standard, reduced or zero rate, are all taxable supplies.
It follows that the persons who make a supply (other than an exempt supply) of goods or services in the UK, make a taxable supply whether or not they are a ‘taxable person’.
TAXABLE PERSON
HMRC indicate that the VAT Act 1994, section 3(1) provides that a taxable person is someone who is, or is required to be, VAT registered.
So, whether or not a person or business is VAT registered, as long as they are delivering taxable supplies on an ongoing bases, they will be classed as a taxable person.
This will mean that a person who is selling taxable supplies on a small scale, may not be VAT registered because they have not reached the VAT registration threshold, but they will be deemed to a taxable person and a person who sells a one-off taxable supply (maybe an old personal belonging) will not be required to be VAT registered and will not be classed as a taxable person.
YOUR TASK: Identify whether the following statements are true or false
| Statement | T/F |
| The sale of children clothes which are a zero-rated products are not taxable supplies | |
| A man commercially selling books which are zero-rated is not a taxable person | |
| A woman engaged in house clearance and went to a car boot sale to dispose of old products which were all standard rated items, will not be classed as a taxable person | |
| A petty trader sells her reduced rates items at car boot sales all over Manchester, so she will be a taxable person who delivers taxable supplies | |
| A petty trader sells her exempt services near a local market, so she will be a taxable person who delivers non-taxable supplies |
ANSWERS:
| Statement | T/F |
| The sale of children clothes which are a zero-rated products are not taxable supplies | F |
| A man commercially selling books which are zero-rated is not a taxable person | F |
| A woman engaged in house clearance and went to a car boot sale to dispose of old products which were all standard rated items, will not be classed as a taxable person | T |
| A petty trader sells her reduced rates items at car boot sales all over Manchester, so she will be a taxable person who delivers taxable supplies | T |
| A petty trader sells her exempt services near a local market, so she will be a taxable person who delivers non-taxable supplies | F |