Some supplies of goods or services are exempt from VAT, meaning you do not charge VAT on them and they do not count towards the VAT registration threshold.

Common exempt services include:

• Insurance, finance, and credit services
• Education and training (in many cases)
• Membership and subscription organisations
• Leasing or letting of commercial land and buildings (unless the business opts to tax)

Key takeaway:
If your business only supplies exempt items, you normally do not need to register for VAT because you’re not making taxable supplies — however, you cannot reclaim VAT on expenses related to exempt supplies.