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Relevant goods

Relevant goods

You receive a supply of goods (including by acquisition or import) if the exclusive ownership of moveable items is passed to you from another person.

You also receive a supply goods if:

  • your own goods are transferred from another member state
  • they’re transferred under an agreement where title will pass at a later time, such as a hire-purchase agreement
  • receive water or any form of power, heat, refrigeration or ventilation but not if you hire in equipment which does this - that’s a supply of services (see VAT Notice 701/19: fuel and power and VAT Notice 701/16: water and sewerage services)

Relevant goods are goods that are used exclusively for the purposes of your business, but don’t include:

  • vehicle costs including fuel, unless you’re operating in the transport sector using your own, or a leased vehicle
  • food or drink for you or your staff
  • capital expenditure goods of any value, see paragraph 15.1
  • goods for resale, leasing, letting or hiring out if your main business activity doesn’t ordinarily consist of selling, leasing, letting or hiring out such goods
  • goods that you intend to re-sell or hire out, unless selling or hiring is your main business activity
  • goods for disposal such as promotional items, gifts or donations
  • any services

Examples of relevant goods

This isn’t an exhaustive list:

  • stationery and other office supplies to be used exclusively for the business
  • gas and electricity used exclusively for your business
  • fuel for a taxi owned by a taxi firm
  • stock for a shop
  • cleaning products to be used exclusively for the business
  • hair products to use to provide hairdressing services
  • standard software, provided on a disk
  • food to be used in meals for customers
  • goods provided by a subcontractor and itemised separately
  • goods brought into the UK if they are not otherwise excluded
  • goods bought without VAT being charged, if they are not otherwise excluded

Examples of supplies that aren’t relevant goods

This isn’t an exhaustive list:

  • accountancy fees, these are services
  • advertising costs, these are services
  • an item leased/hired to your business, this counts as services, as ownership will never transfer to your business
  • goods not used exclusively for the purposes of your business, for example electricity to supply a home and an office located in the home
  • food and drink for you or your staff, these are excluded goods
  • fuel for a car this is excluded unless operating in the transport sector using your own, or a leased vehicle
  • electronic devices, such as a laptop or mobile phone for use by the business, this is excluded as it is capital expenditure see paragraph 15.1
  • anything provided electronically, for example a downloaded magazine, these are services
  • rent, this is a service
  • software you download, this is a service
  • software designed specifically for you (bespoke software), this is a service even if it is not supplied electronically
  • goods which are bought solely to meet the test, as these would not be used exclusively for the purposes of your business. For example, if the quantity of goods being bought can’t reasonably be used by the business and are simply ‘stockpiled’ or thrown away, even if the business may normally use those items is smaller quantities such as office materials
  • stamps and other postage costs, these are payments for services
Posted on: April 10 2017
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