Weird VAT / Tax things

[AndyAudi]

PH influences my daily life

The what do you object paying for & VAT Q chat today saw me checking to see how much I was charged for syrup this morning at an independent
.
£3 latte, 60p syrup

Genuinely surprised to see split separately for VAT

today’s learning

If you use syrup to flavour or sweeten coffee it’s zero rated.
If you use syrup without the coffee to flavour milk or water it’s 20%.

We must all know about the famous cake or biscuit distinction anyone know any other peculiarities
Jaffa cakes no vat, chocolate digestives 20%

[Ham_and_Jam]

Along the same lines of Jaffa Cakes-

Skips - Zero vat
Quavers - 20% vat

Skips are baked, Quavers Fried

[Ham_and_Jam]

We sell freshly baked products. Lots of them.

I would say 80% are sold hot, fresh from the oven or cooling trays / shelves - Zero vat.

If we attempt to keep them warm or reheat them - 20% vat.

Edited by Ham_and_Jam on Saturday 22 August 10:11

[Ham_and_Jam]

Just thought of another one I remembered from years gone by-

Kinder Bueno (or any vat attracting chocolate bar) 20% vat

Muffin / cake where we put a piece of Kinder Bueno on the top - Zero Vat.

Which always made me think / chuckle, how many pieces can you put on a cake and it still be zero vat. 2,3,4….full bar

[Eric Mc]

Raisins and other such fruits can have different VAT rules and rates depending on which aisle they are in - snack aisle 20%, baking aisle - Zero%.

I always think that VAT regulations are bit like the debates medeival monks had regarding how many angels could stand on a pin head.

Another weird one -

Biscuit tin containing biscuits - Zero%
Empty biscuit tin - 20%

The difference is due to the different VAT rules applying to baked food products and containers.

Edited by Eric Mc on Saturday 22 August 10:45

[Ham_and_Jam]

Eric Mc said:

Raisins and other such fruits can have different VAT rules and rates depending on which aisle they are in - snack aisle 20%, baking aisle - Zero%.
I

Edited by Eric Mc on Saturday 22 August 10:45

Which is a bit bonkers really.

So if you put a banana next to the HobNobs its 20% vat?

[CloudStuff]

Further evidence - not a serious country.

[AndyAudi]

I love stuff like this !

The banana question got me thinking

Fruit is the next step of a flower

Flowers are standard rate, Fruit is zero

However,
Flowers grown for decoration - standard
Same Flowers grown for eating - zero

[Venisonpie]

AndyAudi said:

PH influences my daily life

The what do you object paying for & VAT Q chat today saw me checking to see how much I was charged for syrup this morning at an independent
.
£3 latte, 60p syrup

Genuinely surprised to see split separately for VAT

today s learning

If you use syrup to flavour or sweeten coffee it s zero rated.
If you use syrup without the coffee to flavour milk or water it s 20%.

We must all know about the famous cake or biscuit distinction anyone know any other peculiarities
Jaffa cakes no vat, chocolate digestives 20%

Better than that, the coffee on its own is vatable. Put a load of ice in the same drink and it isn't (Iced latte for example).

[AndyAudi]

Venisonpie said:

Better than that, the coffee on its own is vatable. Put a load of ice in the same drink and it isn't (Iced latte for example).

Ah, but if you put the syrup in the iced latte it’d be vat able again as not a coffee!

[StevieBee]

The printing of a leaflet is zero rated unless the leaflet has space for someone to write something on it or it acts as a discount voucher.

Toilet Paper is charged at the standard 20% rate because it is legally classified as a non-essential luxury item whereas caviar is zero-rated as it is considered a basic item in historic definitions!!!

If you buy a Gerbil in a pet shop you pay tax but not if you buy a rabbit because a rabbit is classified as food.

[Eric Mc]

StevieBee said:

The printing of a leaflet is zero rated unless the leaflet has space for someone to write something on it or it acts as a discount voucher.

Toilet Paper is charged at the standard 20% rate because it is legally classified as a non-essential luxury item whereas caviar is zero-rated as it is considered a basic item in historic definitions!!!

If you buy a Gerbil in a pet shop you pay tax but not if you buy a rabbit because a rabbit is classified as food.

So now we know the real reason Freddie Starr ate that hamster - it was a VAT dodge.

[alfabeat]

Just imagine how much "effort/resource" is wasted in deciding this crap and then challenging it's implementation. Just apply, for example, 15% to everything and be done with it. In one fail swoop we can get rid of a whole department at HMRC and make everyone's life easier.

[StevieBee]

alfabeat said:

Just imagine how much "effort/resource" is wasted in deciding this crap and then challenging it's implementation. Just apply, for example, 15% to everything and be done with it. In one fail swoop we can get rid of a whole department at HMRC and make everyone's life easier.

.... whilst increasing costs of many things for many people many of whom may not be able to afford the price rise. Adding VAT to things like water, kids clothes and basic food is not a good look for any political party and I doubt would make 'everyone's' life easier, other than HMRC - except for those laid off who would fall into the category of those disadvantaged with the move,

I think the word you are looking for is 'reform' (with a small R!). There are certainly anomalies and non-sensical examples - the caviar example I mentioned above being one - many of which are based on historical definitions that no longer apply. So, some review of these may well be in order.

[Terminator X]

Didn't VAT come in after WW2 and was supposed to be temporary! Like all taxes once it arrives it stays. Have any taxes been reversed just out of interest?

Also I'm old enough to remember VAT at 15% and then 17.5%.

TX.

[Mr Overheads]

StevieBee said:

alfabeat said:

Just imagine how much "effort/resource" is wasted in deciding this crap and then challenging it's implementation. Just apply, for example, 15% to everything and be done with it. In one fail swoop we can get rid of a whole department at HMRC and make everyone's life easier.

.... whilst increasing costs of many things for many people many of whom may not be able to afford the price rise. Adding VAT to things like water, kids clothes and basic food is not a good look for any political party and I doubt would make 'everyone's' life easier, other than HMRC - except for those laid off who would fall into the category of those disadvantaged with the move,

I think the word you are looking for is 'reform' (with a small R!). There are certainly anomalies and non-sensical examples - the caviar example I mentioned above being one - many of which are based on historical definitions that no longer apply. So, some review of these may well be in order.

Picking out individual examples of silliness like the one sin this thread just adds more layers of rules. By making it 15% across the board and then adding some broad exemptions (childrens clothes being a good example) that make sense keeps it simple, obviously there will be some edge cases that will add back layers of complication overtime, but the ruleset has become too thick and unwieldly so strip it back.

[Eric Mc]

Terminator X said:

Didn't VAT come in after WW2 and was supposed to be temporary! Like all taxes once it arrives it stays. Have any taxes been reversed just out of interest?

Also I'm old enough to remember VAT at 15% and then 17.5%.

TX.

No.

VAT was introduced in 1973 and was a requirement of our entry into the EEC (later EU). It replaced something called "Purchase Tax" which had been in place since 1940.

Of course, with Brexit we had a golden opportunity to abolish "EU imposed legislation" - or so the Brexiteer mantra went.

However, VAT hauls in so much to the Exchequer that only a mad government would abolish it. It currently accounts for about 1/3 of all money's collected by the government.

It is such an effective way of collecting tax that many countries which have nothing to do with the EU have introduced their own form of VAT.

[Terminator X]

Lower VAT would be an easy win to reduce the pressure of the cost of living crisis given it is added to almost everything. When Burnham says he wants to help but leaves it alone then you know he's another in the talking BS camp.

TX.

[Eric Mc]

Terminator X said:

Lower VAT would be an easy win to reduce the pressure of the cost of living crisis given it is added to almost everything. When Burnham says he wants to help but leaves it alone then you know he's another in the talking BS camp.

TX.

Every government would love to reduce tax rates but it isn't always an option.
To be fair to Burnham, it does look like they are reducing VAT on gas and electricity costs.

But, there isn't much room to manoeuver.

[StevieBee]

Mr Overheads said:

StevieBee said:

alfabeat said:

Just imagine how much "effort/resource" is wasted in deciding this crap and then challenging it's implementation. Just apply, for example, 15% to everything and be done with it. In one fail swoop we can get rid of a whole department at HMRC and make everyone's life easier.

.... whilst increasing costs of many things for many people many of whom may not be able to afford the price rise. Adding VAT to things like water, kids clothes and basic food is not a good look for any political party and I doubt would make 'everyone's' life easier, other than HMRC - except for those laid off who would fall into the category of those disadvantaged with the move,

I think the word you are looking for is 'reform' (with a small R!). There are certainly anomalies and non-sensical examples - the caviar example I mentioned above being one - many of which are based on historical definitions that no longer apply. So, some review of these may well be in order.

Picking out individual examples of silliness like the one sin this thread just adds more layers of rules. By making it 15% across the board and then adding some broad exemptions (childrens clothes being a good example) that make sense keeps it simple, obviously there will be some edge cases that will add back layers of complication overtime, but the ruleset has become too thick and unwieldly so strip it back.

The thing is that whilst it's fun to pick out the anomalies, I don't think the list of examples is particularly long. There are what may appear odd complexities in certain sectors but if you're operating in the sector they apply to, chances are you'll understand them - or have an accountant that does.