Some EU member states, including the UK have a zero rate which was agreed as part of their EU Accession Treaty. For example, in the UK most ‘basic’ food stuffs are zero rated. However, the UK is no longer able to add to the zero rate categories, and the minimum VAT rate that can be applied to any new category that the Government seeks to reduce rate is 5%.
The 5% rate applies to the provision of the following:
- Electricity
- Children’s car seats, booster seats and booster cushions
- Smoking cessation products
- Sanitary Protection products
- Mobility aids for the elderly (installation)
- Renovation / Alteration of certain, empty residential buildings
- Converting certain premises into different living accommodation
- Energy saving materials
If you are unsure if a supply you are about to make should or should not be made at the reduced rate of 5% please contact us for clarification.
Lesley Malkin
Audit Partner
