VATGPB8645 - Other local authority activities: miscellaneous (A to E): cemeteries and crematoria

Introduction

This page covers the supplies made by local authorities in connection with interment and cremation of the dead.  General information on the supplies by undertakers, stonemasons and similar is given in VAT Notice 701/32 burial, cremation and commemoration of the dead on the GOV.UK  website.

The policy on local authority supplies has been formed following decisions in Rhondda Cynon Taff County Borough Council (2000) and Sandwell Metropolitan Borough Council (2013). The supplies in cemeteries and crematorium are treated differently because of the different legal provisions.

Following a review undertaken with CIPFA, the VAT treatment of some of supplies within cemeteries and crematoria changed with effect from 1 December 2015.

Cemeteries

The Local Authorities’ Cemeteries Order 1977 (LACO) governs the provision of supplies by a local authority. This legislation applies only to public bodies so supplies made under LACO are outside the scope of VAT.  Private cemeteries are legislated for under the Cemeteries Clauses Act 1847.  The Rhondda Cynon Taff tribunal considered the legal provisions and then the supplies by both the private and public sector concluding that that supplies by local authorities did not pose a significant distortion of competition.

Supplies not under LACO for example flowers or a standalone memorial take on the normal VAT liability.

Examples of services a local authority may provide are in the box below

	Services directly linked to burial in a cemetery	VAT treatment pre 01/12/2015	VAT treatment from 01/12/2015
1	Interment (including ashes and parts of bodies) *	Non-business	Non-business
2	Purchase of a plot for interments	Exempt	Exempt (SR if option exercised)
3	Removal and re-fixing of a tombstone*	Non-business	Non-business
4	Maintenance of grave *	Non-business	Non-business

* Controlled under LA Cemeteries Order 1977   

Crematoria

	Services directly linked to the crematorium	VAT treatment pre 01/12/2015	VAT treatment from 01/12/2015
1	Cremation fees	Exempt	Exempt
2	Scattering of ashes	Exempt	Exempt
3	Cremation certificates signed by a doctor	Non-business	Non-business
4	Free Cremations carried out under Public Health Acts	Non-business	Non-business
5	Live web streaming of funeral, burial or cremation services (but not services only linked to commemoration of the dead)	Exempt	Exempt

The provision of crematoria by a local authority is primarily a business activity. This is because local authorities act under the same legal regime as private crematoria operators. Any costs incurred relating to exempt activities should be included in the section 33 method and partial exemption calculations.

Services linked to commemoration of the dead

There are a number of services or rights that can be purchased to commemorate the passing of a loved one. Not all of these are governed under LACO.

Examples are below

	Supplies linked to commemoration of the dead	VAT treatment pre 01/12/2015	VAT treatment from 01/12/2015
1	Entries in books of remembrance	Standard-rated	Standard-rated
2	Memorial Cards	Standard-rated	Standard-rated
3	The supply by a local authority of a memorial	Non-business	Standard-rated
4	The supply of an immovable memorial, with a right over land for a fixed period (with or without interred ashes) including engraving of plaque. Note the difference between this and 3 above.	Exempt unless option to tax exercised then Standard-rated	Exempt unless option to tax exercised then Standard-rated
5	Sale of right to make an inscription on headstone, plaque or other commemorative items.	Non-business	Non-business
6	Inscription only on headstones, plaques or other commemorative items in a crematorium.	Standard-rated	Standard-rated
7	Sale of seat or bench that then becomes the responsibility of the purchaser to maintain.	Standard-rated	Standard-rated
8	Dedication plaques on seats or benches where ownership and maintenance responsibility remains with the LA	Non-business as considered a donation	Non-business as considered a donation
9	Dedication of a rose bush or other garden item with a small acknowledgment plaque where ownership and maintenance responsibility of the bush remains with the LA	Non-business as considered a donation	Non-business as considered a donation
10	Maintenance of gardens war memorials etc.	Non-business	Non-business
11	Donated funds towards a memorial or facilities and their upkeep	Non-business	Non-business
12	Audio & visual enhancements including broadcasting beyond the provision of music (but not live streaming of funeral, burial or cremation services)	New	Standard-rated
13	Memorial books - these are normally a copy of the entry in the Book of Remembrance - please see notice 701/10	SR or ZR dependant on content	SR or ZR dependant on content