Reply To: Vat exemption?

Forum Categories GENERAL VAT DISCUSSIONS Vat exemption? Reply To: Vat exemption?

#56033
VAT-adviser
Member

All varieties of leaf tea, powdered instant tea, and tea bags are zero rated items. 

If you are selling a tea with other items that are standard rated then it becomes a mixed supply and you need to assess: 

1. What is the main supply and whether the rest of the items sold are ‘incidental’ items, which can be ignored. In this case the VAT rate of the products will be based on the main supply.

2. If the customer clearly expects to receive both items in return for their payment, each subject to different rates of VAT, the VAT tax must be apportioned/charged separately.