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Thread: VAT on Compost

  1. #1
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    VAT on Compost

    Hi,

    I have a new client that manufactures and sells compost. They are a newly registered VAT company, and I have to advise on whether they should charge VAT on the Compost that they are selling...

    As far as I am concerned, they should because they are not selling the raw materials. They buy the raw materials, add products and sell the total product as "compost".

    Am I right?

    Kind regards,

    Chris

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    Hi Chris

    Read Schedule 2 of the VAT Act.

    If the customer is a farming enterprise in possession of a VAT registration certificate indicating the farming enterprise’s entitlement to purchase the goods listed in Schedule 2 at the zero rate, then your client is permitted to charge VAT at 0% if compost meets the definition of fertilizer.

    There are some administrative requirements, but in a nutshell under those circumstances your client should charge at zero rate.

  3. Thanks given for this post:

    Dave A (07-Aug-19)

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