In the United Kingdom, value added tax, is a tax on the sale of goods and services. The U.K. is a member of the European Union and European law requires the U.K. to collect a value added tax from most sales, although the U.K. can set its own rate for this tax and can exempt certain sales of goods and services from the tax.
Burial and Cremation
Business involving burial and cremation of the dead, including burial at sea, is exempt from the value added tax. This includes business conducted between funeral directors involving the provision of burial, cremation and commemoration services, where this is conducted with regard to any single funeral. Funeral directors are not allowed to claim back this tax paid on goods and services they purchase to use in providing funeral services, such as coffins and headstones, as these will be exempt from the tax at point of sale.
Value added tax rules specify the goods and services that are exempt from VAT, including the supply of coffins and coffin covers, embalming, digging of graves, use of a Chapel of Rest, transport of mourners, transport of the deceased and the tolling of bells at the funeral service. Flowers and wreaths are subject to the tax at the standard rate. Burial or cremation of animals is not exempt and the value added tax is charged at the standard rate.
Sport and Leisure
Non-profit organisations providing services for sports activities on its premises are exempt from charging a value added tax for the use of its facilities. The VAT rules specify which goods and services are exempt and these include the use of changing rooms, showers, locker rentals and equipment storage. Membership subscriptions for sports clubs are exempt, and providing that the subscription covers active participation in a sporting activity. Sports that specifically qualify for the value added tax exemption status include athletics, roller skating and baseball.
Leisure services that are exempt from this tax include betting and gaming, including betting on horse racing, pool, and games of chance, such as casino games like roulette and blackjack. Lottery ticket sales are exempt from value added tax, as are lottery games played via the Internet. The retailer portion of lottery ticket sales is also exempt from VAT.
Antiques and art works that are sold to public collections, such as those held by public galleries and museums, including the British Museum and the National Gallery, are exempt from the tax when the sale is privately arranged. Public sales of antiques and works of art attract the value added tax at the standard rate, even if the purchaser is the curator of a public collection. Wherever works of art or antiques are used to settle an outstanding tax obligation, or estate tax, with Her Majesty's Revenue and Customs service (HMRC), the value of the goods is exempt from a value added tax component, meaning that the agreed value of these goods does not include the tax, and no value added tax is due to HMRC.