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VAT on Cycle Helmets - are the web shops getting it wrong?

Does anyone know why many online bike store show helmets priced "inclusive of VAT"? As I understand it helmets have been zero-rated for a decade.

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PJ McNally | 13 years ago
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I just mean that on the website, the price has the tagline "inclusive of vat" under it, I assume because they put that on the template for all their online stock.

Now I can't remember which site it was i saw originally, but these ones are doing it:

http://www.freemanscycles.co.uk/cycle_helmets/cycle_helmets.asp?cat=Helmets
http://www.stjohnsupplies.co.uk/products/default.asp?productId=F92120

The big players seem to have got it right.

Thanks for explaining "zero-rated" vs "exempt" - that didn't make sense to me before.

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dave atkinson | 13 years ago
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when you say they show them inclusive of VAT, do you mean that they're more expensive, or that they're showing a VAT component on a broken down invoice?

You're right: helmets are zero rated. But technically speaking you're still paying VAT on them, just at 0%. This doesn't affect the price at point of sale, but it does affect what a distributor is allowed to claim for: if the goods are zero rated you can still claim back the VAT on your expenses incurred while selling them, if they're exempt you can't.

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