business rates to council

[something urgent]

Dear All,

Please advise VAT rate for business rates to council. I am confused between out side the scope or exempt.

One accountant said it is exempt ad other says out side the scope.

regards

 

[john1989]

Outside scope

 

[something urgent]

thanks, any reason why its not exempt.

 

[David Griffiths]

Any reason why it matters?

If you start looking for reason and logic behind tax you'll drive yourself potty.

 

[john1989]

When it comes to tax, often there is no logic!

 

[something urgent]

i need reason to convince the accountant who says its exempt thats why asked.

thanks anyway

 

[john1989]

Or...you could ask him to prove why it is exempt.

 

[something urgent]

i understand business rates are kind of tax so tax on tax makes no sense

 

[something urgent]

so ts out side the scope as there is no supply

 

[Scalloway]

If you really want to know

http://www.accountingweb.co.uk/anyanswers/vat-exempt-outside-scope/507915

VAT is charged on the supply of goods or services in the UK by a taxable person in the course of furtherance of a business carried on by them.

In the case of business rates, there is no supply, and so that's outside the scope.

 

[something urgent]

thanks for your time. I appreciate.

 

[kevin.doran]

Call HMRC to ask.

Then call back straight after and ask again.

 

[David Griffiths]

tax on tax makes no sense

But it exists. Stamp Duty Land Tax is charged on the full price of a sale, including the VAT. Tax on tax it is.

 

[teddys]

Dear something urgent,

As others have said it is usually the accountant that tells you why or why not tax or vat should apply. However, to help you tell your accountant why there is VAT on business rates here we go:

1. The governing law is the VATA 1994
2. In order for VAT to apply there must be a supply of goods or services which could either be standard rated, reduced rated, zero rated or exempt
3. Business rates paid to a local authority are in the form of statutory charge, and NOT a payment made in consideration for any supplies made.
4. So in sum there is no supply, so it's outside the scope VATA 1994!

Simples!!

 

[something urgent]

thanks to all