VQOTW: Celebrants at Funerals
My client is a ‘celebrant’ who attends funeral services to deliver eulogies and conduct the ceremony at crematoria and other venues. He is not a religious minister but effectively does the same thing as a minster would do at a funeral. Charges for ministers attending funerals are exempt from VAT so is my client’s turnover also exempt so he doesn’t have to register for VAT?

The exemption referred to here is the one with regard to burials, cremations and commemoration of the dead – VAT Act 1994, Schedule 9, Group 8. Items 1 and 2 of Group 8 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

This usually means the exemption applies to burial or cremation (including burial at sea) and the making of arrangements for, or in connection with, burial and cremation. It also applies to the services of one undertaker to another in connection with a specific funeral.

The exemption is fairly narrow, but will also apply to supplies that are integral to the burial or cremation and supplied as a funeral package. These will include;

– supply of 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
– provision of bearers
– transport of mourners in limousines
– bell tolling and music at the funeral service

The above is detailed further in VAT Notice 701/32.
https://www.gov.uk/guidance/burial-cremation-and-commemoration-of-the-dead-notice-70132

Where a funeral involves the provision of a religious service by a minister, the notice confirms that a fee payable to the relevant church will be outside the scope of VAT (s3.3 refers). The provision of a religious service will be an act of worship following prescribed rules. This is a non-business activity so is outside the scope of VAT (not exempt from VAT as per Group 8).

This is detailed further in the Business/Non-Business Manual at VBNB44500.
VBNB44500 – VAT Business/Non-Business Manual – HMRC internal manual – GOV.UK (www.gov.uk)

As your client is not a church providing a minister to perform a religious service, the charge he makes for officiating at a ceremony will not be a non-business activity of a religious service under VBNB44500. Neither will it be covered by the exemption in Group 8.

If he is conducting a business activity as a ‘celebrant’ at funeral ceremonies, then his supplies will be taxable and will count towards turnover for assessing his liability to VAT registration.

 


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Paul has 32 years-worth of experience in VAT with HMRC. He has worked with many varied small, medium and large businesses and organisations, resolving varied VAT queries and dealing with compliance issues.

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