Glossary

Taxable supply

A taxable supply is any sale VAT can apply to — standard, reduced or zero-rated — as opposed to an exempt supply that falls outside VAT entirely.

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Standard/reduced/zeroRated

Not exemptDistinction

Definition

A taxable supply is any sale of goods or services on which VAT is chargeable — at the standard, reduced or zero rate. It is distinct from an exempt supply, on which no VAT applies.

In plain terms

If you sell something VAT could apply to — even at 0% — it is a taxable supply. Only genuinely exempt items (like insurance or certain property) fall outside. The distinction decides your registration and reclaim position.

Why it matters for your company

Whether your sales are taxable supplies determines if you must register for VAT and whether you can reclaim input VAT. Zero-rated taxable supplies let you reclaim; exempt supplies do not — see VAT rates explained.