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New Member
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.
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