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You don't have to look very far to find odd anomalies in the VAT world. The recent case of News Corp and Ireland Ltd vs HMRC is close to home for me as a one-time book publisher turned online entrepreneur, and is full of the madness of the English legal system.

The issue is that print versions of newspapers are zero rated for VAT but the online editions are subject to VAT at 20%. This seems fairly silly, and indeed the judge spent a lot of time focusing on whether the content of the publications and the behaviour of the reader are the same in both cases.

Answer: They are.

Despite this, HMRC argued successfully that the current treatment was correct because it is what the law says. It seems the law hasn't been kept up to date to include such new-fangled inventions as the internet. It all came down to the fact that Item 2 Group 3 only zero rates the supply of "goods" not "services" and to be classed as a good, the item being sold must be tangible.

All this made me quite angry, so to regain my sense of fun I thought I would make a list of frankly silly VAT anomalies. Here goes:

VAT

No VAT

Print Newspapers Online newspapers
Strawberry and banana Nesquik Chocolate Nesquik
Chocolate digestives Jaffa cakes
Roasted peanuts Peanuts (shelled but not roasted or salted)
Marshmallow teacakes Snowballs (marshmallow dome with no cake)
Sweet tasting dried fruit (sold as confectionary) Sweet tasting dried fruit (sold for home baking)
Drained or crystallised fruits Drained cherries for use in home baking
Crisps Twiglets, prawn crackers or tortilla chips
Toffee apple Toffee apple on a stick

 

  1. Lin C
    Posted 26-May-2021 at
    VAT rules need to be simplied.
    0
  2. Franklin S
    Posted 18-Apr-2021 at
    VAT is this
    0
  3. Nerys P
    Posted 24-Feb-2021 at
    The newspapers are the wrong way around. Plus jaffa cakes are cakes hence why zero rated, digestives are biscuits but agree the rest are nonsense
    0
  4. Paul R
    Posted 28-Dec-2020 at
    Interesting list of non-vatable items.
    0
  5. Nabeel A
    Posted 25-Dec-2020 at
    The most difficult part is making your clients understand the complicated VAT rules
    0
  6. Tim S
    Posted 08-Dec-2020 at
    I think the Vat rule book is getting bigger and bigger and could do with simplifying to help all users.
    0
  7. Carrie B
    Posted 27-Nov-2020 at
    Interesting, I was aware of some of theese but some of those are just madness.
    0
  8. Victor R
    Posted 17-Nov-2020 at
    It would help if common sense was applied
    0
  9. Atif N
    Posted 15-Nov-2020 at
    Print newspapers are ZERO rated and online editors are 20% vat applies
    0
  10. Naeem Y
    Posted 05-Nov-2020 at
    I never knew this, good to know.
    0
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