What is the VAT rate for discretionary and advisory services?

Discretionary and advisory services typically fall under the category of standard-rated supplies for VAT purposes. This means that the general VAT rate applies, which is set at 20% in many jurisdictions, including the UK. The standard rate is used for most goods and services unless a specific exemption or reduced rate applies.

In the context of VAT, discretionary and advisory services are usually considered to provide a benefit that does not qualify for zero-rating, exemption, or a reduced rate. They directly contribute to the value-added component of the economy and are taxed at the full VAT rate.

It is important to understand the distinctions between different VAT categories. Zero-rated supplies are those that attract VAT at 0%, meaning businesses can reclaim input tax but do not charge VAT to their customers. Exempt supplies are not subject to VAT at all, meaning no input VAT can be reclaimed. The reduced rate applies to specific goods and services, which do not include discretionary and advisory services. Therefore, standard-rating reflects the typical taxation level for such services.