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VAT Government and Public Bodies

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

Introduction

This page covers the supplies made by local authorities in connection with internment 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 {#IDAN24VG} of services a local authority may provide are in the box below

  Services directly linked to burial in a cemetary 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

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 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