We commonly hear the term VAT being thrown around throughout daily life, whether we be at work, doing our weekly shop or out in public, but what is VAT and when does it apply?

What is VAT?

Value Added Tax (VAT) is added to the majority of goods, products and services throughout the European Union and the United Kingdom at a value of 20%. This 20% then gets submitted to the government as a form of tax. However, there are a minority of goods and public services which are exempt from VAT, and others that are listed as zero-rated.

What is the difference between exempt and zero-rated?

Exempt and zero-rated are preferential statuses given by the government for certain essential goods and services.

Companies who supply zero-rated products are still able to reclaim their input VAT, even though they don’t add value added tax to their goods. This is because the product is still taxable, but the rate is 0%.

Companies who supply services and goods which are listed as exempt are not VAT registered. There is no value of VAT added to these products and so there is nothing to reclaim.

Is there VAT on coach travel?

Coach travel is listed as a zero-rated essential service, meaning that there should be no VAT charge when travelling via coach. However, additional extras, such as catering or entertainment services in action whilst on board are VAT registered and you will be expected to pay the additional charge of 20% for these services. This is the same amongst all other forms of domestic passenger transport which can be used to carry 10 or more people at a time.

If you would like to find out more about the costs of coach travel with City Circle, get in touch with our friendly bookings team who will be happy to assist and advise you in regard to any future bookings. Whether you are based in the UK or Scotland, we have a happy and helpful team waiting to assist you with any coach travel queries. Call our London branch on 020 8561 2112 or our Edinburgh branch on 01313332700. You can also email us at go@citycircleuk.com and we will respond to your query within 24 hours.