Hi All, I have also been told this by HMRC, I should have been referring to zero rated rather than exempt. In my experience I have also found discrepancies in the interpretation of the rules by different VAT offices. Like most government legislation it is writing in very wooly language which is open to interpretation. Until a judge rules, it may be that we never find out the exact definition. For example, in the DDA, the term 'reasonable adjustment' is found, but what is the exact meaning of 'reasonable'? I'm sure we all have a different take on this. Brian.