What is an exempt supply?

Schedule 9 of the VAT Act 1994 details the type of supply that falls within the exemption and includes, amongst others, some supplies relating to health and welfare, finance, insurance, education and land. 

It is also important to consider the effect of a partially exempt business having non-business activities. Normally, it must first determine the proportion of VAT incurred relating to these activities and dis-regard this VAT before applying the partial exemption calculation. Any input VAT which is attributed to non-business activities cannot be recovered.