- From 1 September 2024, the sale of voluntary carbon credits in the UK will be standard-rated for VAT
- Voluntary carbon credits verify the reduction of carbon dioxide in the atmosphere
- HMRC previously considered VCCs outside the scope of VAT due to lack of secondary market
- HMRC now recognizes a secondary market for VCCs and will treat most sales as taxable for VAT
- Activities such as first issue by public authority, holding as investment, donations, and sales from unverified projects are exempt from VAT
- VAT relief under terminal markets order will apply to contracts in taxable VCCs traded on terminal markets from 1 September 2024
Source: icaew.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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