HMRC has updated Burial, cremation and commemoration of the dead (VAT Notice 701/32). It explains the VAT liability of funeral services, burials and cremations, goods and services connected with the commemoration of dead people, other goods and services connected with organising funerals, and other activities relating to the disposal of the remains of the dead, including transport of the deceased. It covers:

1. Overview.
2. VAT liability.
3. Supplies made by undertakers and funeral directors.
4. Prepayments and funeral plans.
5. Cemeteries and crematoria.
6. Commemorating a deceased person.
7. Transporting deceased people.

In general, the following services are exempt from VAT:

• the disposal of the remains of a deceased person;
• the making of arrangements for, or in connection with, the disposal of the remains of the deceased; and
• the services of one undertaker to another in connection with a specific funeral of the deceased.

Specifically in relation to places of worship:

• fees payable to churches for ministers’ services are outside the scope of VAT;
• orders of service for use in funeral commemorative services are zero-rated (read Zero-rating of books and other forms of printed matter (VAT Notice 701/10));
• burial (including reburial), cremation and interment of ashes are exempt from VAT, as is the digging, preparation and refilling of a grave.

Any grant of an interest in, right over or licence to occupy land is exempt from VAT (see Land and property (VAT Notice 742)) unless an option to tax has been notified by the land owner (see Opting to tax land and buildings (VAT Notice 742A)). This will include the granting of a right to any grave space or the right to place an urn in a niche, and the supply of a live-streaming service showing the cremation or burial of the remains of the deceased.