VAT on Children’s clothes

Baby products supplier had been charging VAT on all sales including baby towels.

We were very pleased to be able to prove that baby towels could be treated as children’s clothes and therefore be free of UK VAT.  This success followed us exploring the scope of the zero-rating relief in VAT legislation and also what case law was available.  Our analysis led to us being able to show that zero rating should have been applied to previous sales.  After presenting the arguments to HMRC and also proving to HMRC that the client would not have been unjustly enriched by receiving a refund of the VAT paid in error, we were able to secure a >£60k refund for VAT paid in the past.  The icing on the cake was also that the company also still benefits from ongoing reduced VAT payments which has made for improved profits.

Posted in Case Study, Relief?.