VAT on logs

[Marc Lewis]

Am I correct in thinking that VAT is charged at 5% on the sale of logs?

[samarb]

Am I correct in thinking that VAT is charged at 5% on the sale of logs?

 

5% to joe public but 20% if selling to another business if they have the plan to sell on again.

[rovers90]

5% to the end user or 20% if they are selling it on.

See section 7

 

HM Revenue & Customs

[Marc Lewis]

Cheers samarb and rovers90

[baz]

I'm going to state the obvious because you haven't actually mentioned it and it may not be obvious to everyone. You only apply VAT if you are a VAT registered business.

 

Having got the formalities out of the way. The rate applying to fuel sales to the end user is 5%. If you charge for delivery then that has to be charged at 20%. Thats why it makes sense to include delivery within wood pricing rather than say, charge extra per mile or by incremental distance.

[Justme]

Supplies to non domestic can also be sold with 5% VAT if the delivery is "de minimis"

 

3.2 What is 'domestic use'?

3.2.1 Supplies deemed to be for domestic use

Supplies of certain small quantities of fuel and power - known as de minimis - are always treated as being made for domestic use, even when the supply is to a business customer. These limits are explained in Sections 4 (gases), 5 (electricity), 6 (oils), and 7 (solid fuels). Supplies within the limits should be taxed at the reduced rate. You do not need a certificate to apply the reduced rate to such supplies (see paragraph 3.5).

 

It then goes on to say that De minimis rules apply as long as there is no intent for the fuel to be resold. So you could supply a commercial unit with wood at 5% VAT as long as they intend to use it themselves.

 

7.1.2 Wood, peat and charcoal

A supply of wood, peat or charcoal that you hold out for sale solely as fuel qualifies for the reduced rate provided that your customer does not intend to resell it. This applies regardless of the amount you supply.

 

7.1.3 Firewood

Ready-cut pieces of wood of a size suitable for use as fuel - such as logs, short waste ends or damaged timber - are standard-rated if not held out for sale specifically as firewood.

 

'Held out for sale' as fuel means that you advertise and otherwise describe the product at its point of sale as fuel or firewood, and that this is consistent with the packaging and wrapping in which you supply it.

 

All quotes from HERE

[Marc Lewis]

Some factual points there justme.

 

Thanks baz, yes I am vat registered and knew that delivery charge was at 20%. Always good to point these things out though. You have however reminded me that stacking charges will be at 20% which I didn't think of before.