VAT is chargeable on supplies of positive-rated goods or services made in the UK by a taxable person in the course or furtherance of his business. VAT is also chargeable on supplies of zero-rated goods, but the rate is zero.

Generally, levying VAT is the supplier's responsibility. Making a positive-rated supply creates a VAT debt which HMRC can recover from the supplier (VATA 1994, s. 4(1) and Sch. 11, para. 5). HMRC have no right of action, in respect of VAT due, against the recipient of a supply. Neither can the supplier avoid his liability by claiming that the VAT should be recovered from his customer (VATA 1994, s. 1(2)).

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