Updated VAT notice – zero-rating
HMRC have issued an updated version of VAT Notice 714 entitled ‘Zero rating young children’s clothing and footwear’ that explains when supplies of children’s clothing and footwear can be zero-rated. The new version of the notice cancels and replaces the previous version published back in January 2002.
Supplies of children’s clothing and footwear can usually be zero- rated where all the following conditions are met:
- The item must be an article of clothing or footwear;
- The item must not be made of fur;
- The item must be designed for young children, and
- The item must only be suitable for young children.
The notice has been updated to clarify a number of issues relating to children’s clothing including the scope of the term ‘fur skin’, the fact that collars and cuffs can be zero-rated and the VAT liability of uniforms for schools and children’s organisations.