Having worked exclusively as a VAT consultant for a number of years I was aware that I did not (and still don’t) know everything there is to know about this often confusing subject. Until last week, however, I was fairly certain that I understood the rules for childrens’ clothing. It is zero-rated rated isn’t it? Ah well actually not all of it. Thanks to an item on radio 4 last week I have now discovered that it will depend on what materials are used.
Apparently any articles made wholly or partly of fur skin are standard rated. Okay got it, ‘simples’………oh no hang on a minute HMRC guidance goes on to say that actually the following items are still zero-rated:
- Articles made using artificial fur;
- Clothing made of rabbit skin, or sheep or lamb skin;
- Articles made from the skin, if neither tanned nor dressed, of bovine cattle (including buffalo), equine animals, goats or kids (other than Yemen, Mongolian and Tibetan goats or kids), swine (including peccary ), chamois, gazelles, deer or dogs;
- Fur and fur-lined headgear, belts, gloves and footwear;
- Articles only trimmed with fur – unless the area of the trim is more than one fifth of the surface area or, if the garment is new, the cost to the manufacturer of the trimming is more than the cost of the material of the garment, and
- Fur lined boots.
I am beginning to feel sorry for the retailer who has to make the decision based on that, and if that’s not enough having decided that they are dealing an item that is clothing or footwear and not made of fur – oh yes the HMRC guidance actually says this – they must then decide if it is actually ‘designed’ for children.
The decision as to whether a piece of clothing or footwear has been designed for children depends on the size of the article in question. To assist (and I use that word cautiously) HMRC have a chart which must be followed in coming to a conclusion. If you have ever looked at this chart you will understand why I am in doubt as to whether the chart is helpful!.
So good luck if this is your trade sector – rather you than me.
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