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 |