Burial, cremation and commemoration of the dead (VAT Notice 701/32)
Find out about the VAT liability of funeral services and other activities relating to the disposal of the remains of the dead.
1. Overview
1.1 What this notice is about
This notice explains the VAT liability of:
- funeral services
- burials and cremations
- goods and services connected with the commemoration of dead people
- other goods and services connected with organising funerals
- other activities relating to the disposal of the remains of the dead, including transport of the deceased
1.2 Who should read this notice
You should read this notice if you are:
- a funeral director
- an undertaker
- a monumental mason
- a cemetery owner
- a crematorium operator
- any other business that provides goods or services connected with the storage, transportation, disposal or commemoration of the deceased
Although local authorities may be involved in making some of the supplies covered in this notice, they are subject to special rules. If you are responsible for the VAT affairs of a local authority, you should also read Local Authorities and similar bodies (VAT Notice 749).
1.3 Laws covered by this notice
Section 31 of the VAT Act 1994 provides that a supply is exempt if it is specified in Schedule 9 to the Act.
Schedule 9, Group 8, items 1 and 2 provide exemption for both the:
- disposal of the remains of the dead
- making of arrangements for, or in connection with, the disposal of the remains of the dead
2. VAT liability
2.1 Services that are exempt from VAT
In general, the following services are exempt from VAT:
- the disposal of the remains of a deceased person
- the making of arrangements for, or in connection with, the disposal of the remains of the deceased
- the services of one undertaker to another in connection with a specific funeral of the deceased
2.2 Disposing of the remains of the deceased
This usually means either burial or cremation, as well as burials at sea.
2.3 Burying or cremating animals
The burial or cremation of animals is standard-rated.
2.4 Recovering VAT
You can normally only deduct as input tax the VAT you incur on the costs of taxable supplies you have made or intend to make.
You cannot normally deduct as input tax the VAT on costs you incur related to exempt supplies.
If you make both taxable and VAT-exempt supplies, you can usually only deduct as input tax the VAT you incur which relates to your taxable supplies. Read Partial exemption (VAT Notice 706) for more information.
3. Supplies made by undertakers and funeral directors
3.1 Funeral packages
Some goods and services are exempt from VAT when provided by an undertaker or funeral director as part of a funeral package that includes the disposal of the remains of the deceased. These include supplying:
- a coffin
- the cover and fittings for a coffin
- the casket, urn or scatter tube
- embalming
- the digging, preparation and refilling of graves
- the transport of the deceased to the burial ground or crematorium
- a shroud or robe
- use of a chapel of rest
- pall bearers
- transport of mourners in limousines
- bell tolling and music at the funeral service
- a streaming service, allowing family and mourners to view the funeral service, the cremation or burial of the deceased online
- streaming from a chapel of rest of the deceased
3.2 Services provided after the body of the deceased is released to the bereaved
Some services are always exempt from VAT if they are provided by an undertaker or funeral director after the body of the deceased has been released by the mortuary (if applicable).
These services are:
- embalming
- use of a chapel of rest, including a live streaming service for mourners
- digging, preparation and the refilling of graves
- burial or cremation, which includes the provision of a live streaming service for mourners
- the interment of ashes
These services will be exempt whether they are provided direct to the bereaved or to someone else, such as an undertaker or funeral director.
3.3 Other supplies
| Supply | VAT liability |
|---|---|
| Selling coffins, urns, shrouds or embalming fluid | standard-rated (unless provided by an undertaker as part of a funeral package — read section 3.1) |
| Flowers, wreaths, announcement cards, headstones and other commemorative items | standard-rated |
| Newspaper announcements | standard-rated |
| Hire of hearse with driver by an undertaker or funeral carriage master | exempt |
| Hire of limousine with driver from one undertaker to another for the transport of mourners as part of the funeral | exempt |
| Hire of vehicle with driver in other circumstances | standard-rated |
| The hire of a hearse or limousine without a driver | standard-rated |
| Fees payable to Registrars for certified copies of death certificates | outside the scope of VAT |
| Fees payable to churches for ministers’ services | outside the scope of VAT |
| Orders of service for use in funeral commemorative services | zero-rated (read Zero-rating of books and other forms of printed matter (VAT Notice 701/10)) |
| Agency services | standard-rated |
| Services aimed at checking customer satisfaction | standard-rated |
3.4 Calculating VAT on a package that contains both standard-rated and exempt elements
When you supply a package for a single price, but it consists of standard-rated and exempt items, you should split the price of the package between the standard-rated and exempt items. Read the VAT guide (VAT Notice 700) for more information.
For example, you may provide a funeral package containing:
- VAT-exempt goods and services listed in section 3.1, such as the coffin, bearers or transport of the deceased to the cemetery
- standard-rated items, such as flowers and a headstone
In this example, you must split the package between the goods and services listed in section 3.1 and the supply of the flowers and headstone.
3.5 Payments that can be treated as disbursements
You may pay other suppliers (such as newspapers, publishers and caterers) for their goods and services as the agent of your client. You can then recharge your client for the precise amount paid out. You may be able to treat these payments as disbursements for VAT purposes and exclude them when you calculate the VAT due on your main supply to your client.
Read the VAT guide (VAT Notice 700) for more information on the treatment of disbursements.
4. Prepayments and funeral plans
4.1 Introduction
Many people pay for their funeral in advance, to protect their estate from the effect of inflation. As funeral directors cannot legally accept advance payments for a funeral, individuals must take out either:
- a trust-based plan
- a whole-life insurance policy
4.2 Trust-based plans
The plan holder will pay the plan provider for a funeral package of a given standard. They can pay in instalments or by a lump sum.
When the plan holder dies, the plan provider will pay the nominated funeral director for the funeral specified in the plan.
4.2.1 Supplies by plan providers
As a plan provider, you may be an agent or a principal. This affects the supplies you make. Read the VAT guide (VAT Notice 700) to find out if you are an agent or a principal.
If you are a principal, you are contractually responsible for delivering the funeral to the estate of the plan holder. The entire amount paid into the plan by the plan holder is available to you when you supply the funeral package. You should split the payment between exempt and standard-rated elements of the package you provide.
If you are an agent, your role is to help with the delivery of the funeral. Any fees you charge, including your administration fee, are standard-rated. VAT is not charged on any remaining amount which is held in trust until it is released to pay for the services of the funeral director.
4.2.2 Supplies by funeral directors
As a funeral director, VAT is not incurred on any payments you receive for providing exempt supplies in the funeral plan. If the plan includes any standard-rated supplies, you will need to split the payment as required. Read the VAT guide (VAT Notice 700) for more information.
4.2.3 Commission for selling plans
Any commission or marketing fees received for selling trust-based plans are standard-rated.
4.3 Whole-life insurance policies
Providing life insurance is exempt from VAT under the VAT Act 1994, Schedule 9, Group 2. This exemption also applies to intermediaries who arrange for life insurance to be provided. Read Insurance (VAT Notice 701/36) for more information.
4.4 Summary of the VAT treatment of funeral plans
| Supply | VAT liability | |
|---|---|---|
| Trust-based plan | Life insurance plan | |
| Payment from plan provider to nominated funeral director — on death of customer — for burial or cremation | Exempt (Group 8) | Exempt (Group 8) |
| Payment from plan provider to nominated funeral director — on death of customer — for a funeral package of different liabilities | The funeral director must apportion the payment between the exempt (Group 8) and standard-rated supplies (read the VAT guide (VAT Notice 700)) | The funeral director must apportion the payment between the exempt (Group 8) and standard-rated supplies (read the VAT guide (VAT Notice 700)) |
| Deposit or advance payment made by plan provider to nominated funeral director for a funeral package of different liabilities | Generally to be apportioned on same basis as whole package | Generally to be apportioned on same basis as whole package |
| Payments made by individual to a plan provider | If plan provider is acting as agent — outside the scope of VAT If plan provider is acting as principal — to be apportioned between the exempt and standard-rated elements of the funeral package |
Exempt (Group 2) (read Insurance (VAT Notice 701/36)) |
| Management fee charged by plan provider | If plan provider is acting as agent — standard-rated If plan provider is acting as principal — to be apportioned between the exempt and standard-rated elements of the funeral package. |
Not applicable |
| Agent’s fee for selling a plan | Standard-rated | Exempt (Group 2) (read Insurance (VAT Notice 701/36)) |
| Payment by deceased’s estate to nominated funeral director to cover shortfall | Exempt (Group 8) to the extent that it relates to exempt elements of the package | Exempt (Group 8) to the extent that it relates to exempt elements of the package |
| Charges for cancelling or amending plan | Standard-rated | Not applicable |
5. Cemeteries and crematoria
5.1 Cemetery and crematorium services
The following supplies are exempt from VAT:
- burial (including reburial) and cremation
- interment of ashes
- digging, preparation and refilling of a grave
- supplying an urn or casket in connection with a particular funeral
- brick, block or concrete lining of a grave, when this is required by the cemetery or church authorities because of unsuitable ground conditions
- any grant of an interest in, right over or licence to occupy land (read Land and property (VAT Notice 742) unless an option to tax has been notified by the land owner — read Opting to tax land and buildings (VAT Notice 742A)), this will include the granting of a right to any grave space, or the right to place an urn in a niche
- the exhumation of a body that is reburied elsewhere at the request of the family of the deceased
- the supply of a cremation certificate (form 4, 5 or 10) by a doctor
- the removal of a pacemaker from the deceased before cremation
- the supply of a live streaming service showing the cremation or burial of the remains of the deceased
The following supplies are standard-rated:
- charges for erecting, working on or repairing monuments in a cemetery or crematorium, except where the removing or refixing of memorial headstones is necessary to allow further burial
- any grant of an interest in land which has been opted to tax — read Opting to tax land and buildings (VAT Notice 742A) — this includes the right to any grave space, or the right to place an urn in a niche
- goods and services in connection with the commemoration of deceased people (read section 6)
- exhumation services, when the body will not be reburied at another site
6. Commemorating a deceased person
6.1 Goods and services in connection with commemoration of the deceased
Goods or services connected with the commemoration of the deceased are generally standard-rated. The following are examples of standard-rated items:
- supplying memorial headstones or plaques
- erecting, repairing or maintaining memorial headstones
- inscribing headstones, plaques or other commemorative items
- flowers and wreaths
- planting trees or rosebushes
- memorial vases and seats
- services of affixing, repairing or maintaining a plaque
- printing ‘In Memoriam’ announcements in newspapers
- recording entries in books of remembrance
Memorials or commemorative services which are not provided during the burial, cremation or disposal of the deceased are standard-rated.
6.2 Removing or re-fixing memorial headstones to allow further burial
When the removal and re-fixing of a headstone is carried out as a result of a further burial in the same plot, then this, together with any necessary cleaning, is exempt.
Adding a further inscription to the headstone is standard-rated.
6.3 Memorial buildings
Constructing a new building, or working on an existing building, is usually standard-rated. There are exceptions — read Buildings and construction (VAT Notice 708).
7. Transporting deceased people
7.1 Transporting a deceased person within the UK
| If you are an undertaker or a funeral carriage master transporting a deceased person | Then this is |
|---|---|
| to a burial ground or crematorium as part of a funeral (whether you supply this service to the bereaved family or to another undertaker) | exempt from VAT |
| to an undertaker or funeral director who will provide the funeral | exempt from VAT |
| from a school, university or research institution to a burial ground or crematorium | exempt from VAT |
| to a public mortuary | standard-rated |
7.2 Repatriation packages supplied by undertakers
As an undertaker or business specialising in repatriation, some elements of the repatriation packages you offer will be exempt from VAT. These are:
- goods and services covered by sections 3.1 and 3.2 (for example, coffin, embalming, use of chapel of rest)
- services of obtaining documents and permits necessary to repatriate the deceased
- transportation of the deceased to a burial ground, crematorium or another undertaker
Your customer is the person or business you have a contract with.
The place of supply is where your customer belongs if:
- they are ‘in business’
- they are not receiving your services for private purposes
If your customer is a private individual, such as a family member of the deceased, the place of supply is where you belong.
To find out if your customer is ‘in business’, read Place of supply of services (VAT Notice 741A).
7.3 International transport supplied by airlines and other carriers
General purpose carriers, such as airlines, should apply the VAT rules for transporting goods when transporting a body between the UK and another country. Read section 7 of this notice and Freight transport and associated services (VAT Notice 744B) for more information.
7.3.1 Supplies to business customers
If you transport a body for a business customer, the place of supply is where the customer belongs. It does not matter where you transport the body to or from.
Business customers include insurers and undertakers.
If your customer belongs in the UK, the place of supply of your services is the UK. Your supply will be zero-rated if you transport the deceased from a place within the UK to a place outside of the UK (or the other way around). Otherwise, it will be standard-rated. You should account for VAT in the UK.
If your customer belongs outside the UK, the place of supply of your services is outside the UK. This means that you will not pay VAT in the UK.
7.3.2 Supplies to non business customers
The rules are different if you transport a deceased person for a private individual, such as a relative of the deceased.
If you transport a body from the UK to another country (or the other way around), the place of supply is where the transportation is performed in proportion to the distances covered. Transportation within the UK is zero-rated. You may need to register for VAT in the other country.
7.3.3 Places of supply outside the UK
You do not need to pay VAT in the UK if the place of supply is another country. If you supply goods or services in an EU member state, you may need to register for VAT there.
You can recover input tax on supplies made outside the UK, subject to the normal rules. Read the VAT guide (VAT Notice 700) for more information about input tax.
7.4 Bringing human remains to the UK from overseas
If you operate under the Northern Ireland protocol, you do not need to pay import VAT or acquisition tax when you import:
- a coffin containing a dead body
- an urn containing ashes
- flowers and wreaths accompanying a coffin or urn
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Last updated 29 February 2024 + show all updates
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Information about the VAT treatment of live streaming services has been added.
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First published.