A recent case has reaffirmed the dangers for vendors of goods which have different VAT rates. If they
A recent case has reaffirmed the dangers for vendors of goods which have different VAT rates. If theyfall into the trap of supplying a range of goods at the zero-rate of VAT because the main supply is zero-rated, they could face hefty VAT assessments. The case involved a caravan supplier, who also supplied contents for the caravans and zero-rated these because caravans themselves are zero-rated for VAT under
The Advocate General ruled that an exemption from standard-rating of an item applies only to that item and not ancillary items sold with it. In his opinion, this is the case unless 'the application of a separate rate of tax' would cause 'insurmountable difficulties'. While the European Court of Justice is not bound to follow the Advocate General’s opinion, it is highly likely that it will.