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The Book-keepers Forum -> VAT, Payroll & Tax -> VAT on Fruit & Milk Sales
Post Info TOPIC: VAT on Fruit & Milk Sales
woody88


Senior Member

Status: Offline
Posts: 227
Date:
VAT on Fruit & Milk Sales
 

Evening all,

Hope everybody's enjoying the warm spell.

I have a client who sells boxes of fruit and milk to offices. He estimates that his Sales will be around £ 85k in the next 12 months. As this exceeds the VAT threshold, I have advised that he needs to register for VAT in the next few months.

Based on the fact that fruit sales have no VAT on them, he will always receive a VAT Refund from HMRC as his phone, motor expenses and small sundry items all have VAT on them.

Is there are legislation that states that he is exempt from registering from VAT or does he need to register and then receive refunds for the forseeable future.

Just got a niggling doubt that i'm missing something.

Thanks Ben



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MarkS


Guru

Status: Offline
Posts: 986
Date:
 

Hi Ben

Both fruit and milk are zero rated food items.

As they are zero rated they are taxable supplies.

They dont have to register for VAT the now as only need to register if sales in the last 12 months exceeds the VAT threshold of £77k or they expect sales in the next 30 days to exceed £77k.  However, given they are supplying zero rated items then there is no reason why they shouldnt register for VAT as as you say they will be able to reclaim VAT on all their inputs and always be in a repayment position.

They should  consider doing monthly VAT returns in order to get VAT refund on a monthly basis though the admin cost of doing this has to be weighed up against the cashflow benefit.

Regards

MarkS



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Providing bookkeeping, accounting and taxation services to small and medium sized businesses.

woody88


Senior Member

Status: Offline
Posts: 227
Date:
 

Thanks for the reply Mark,

Have a nice sunny day!!



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