What is the difference between zero-rated and exempt in Jersey GST?

Both mean the customer is charged no GST, but they behave differently for the business. A zero-rated supply is still a taxable supply at a rate of 0%, so the business can normally reclaim the GST it paid on related costs. An exempt supply sits outside the GST system, so the GST on related costs generally cannot be reclaimed and becomes a real cost.

Do zero-rated sales count towards the GST registration threshold?

Zero-rated sales are taxable supplies, so they normally count towards taxable turnover for the £300,000 registration test. Exempt supplies generally do not. Because this decides whether you must register at all, confirm your own position with Revenue Jersey on gov.je.

What rate is standard-rated GST in Jersey?

Jersey GST has a standard rate of 5%. That is the default treatment for most goods and services supplied in Jersey unless a specific rule makes the supply zero-rated or exempt.

How do I know which category my sales fall into?

Start from the assumption that a supply is standard-rated at 5%, then check whether a specific zero-rating or exemption applies to it. The categories are set out by Revenue Jersey and turn on the nature of the supply, so check gov.je or take advice rather than guessing from the UK VAT equivalent.

Zero-Rated vs Exempt: Jersey GST Rates Explained

Two of these three categories mean the customer pays no GST. That is why people treat them as interchangeable, and why the mistake is expensive. The customer sees the same thing either way. Your business does not.

The three categories

Standard-rated. The default. Jersey GST at 5% is added to the sale, you collect it, and it goes to Revenue Jersey on your return. Most goods and services supplied in Jersey land here unless something specific says otherwise.

Zero-rated. Still a taxable supply, but the rate applied is 0%. Nothing is added to the customer's invoice. Crucially the supply stays inside the GST system, which is what preserves your ability to reclaim input tax.

Exempt. Outside the scope of GST. No GST is charged, and because there is no taxable supply, there is generally no right to reclaim the GST you were charged on the costs of making it.

Which specific goods and services fall into zero-rated or exempt treatment is set by Revenue Jersey, and it is not the same list as UK VAT. Check the current categories on gov.je rather than assuming the UK treatment carries across.

Why the difference matters

It comes down to input tax — the GST you pay your own suppliers. Sell zero-rated and you can normally still reclaim that. Sell exempt and you usually cannot, so it stops being a tax you pass through and becomes an ordinary cost sitting in your margin.

The practical result: a business making zero-rated supplies can be in a permanent reclaim position, getting money back from Revenue Jersey each return. A business making exempt supplies is quietly absorbing 5% on much of its cost base with no way to recover it.

Side by side

	Standard-rated	Zero-rated	Exempt
GST added to your invoice	Yes, at 5%	No (0%)	No
Is it a taxable supply?	Yes	Yes	No
Reclaim GST on related costs	Yes	Normally yes	Generally no
Counts toward the £300,000 threshold	Yes	Normally yes	Generally no
Goes on your GST return	Yes	Yes	Not as a taxable supply

General treatment only. The specific rules turn on the nature of the supply — confirm yours with Revenue Jersey on gov.je.

Businesses that do both

This is where it stops being academic. A business making a mix of taxable and exempt supplies cannot simply reclaim all of its input tax. The GST on costs has to be apportioned between the two, and only the part relating to taxable supplies is normally recoverable.

Getting that split defensible means your bookkeeping has to separate the income streams from the start, not at year end. Once costs are lumped into one account, reconstructing a credible apportionment is slow and the figure is easy to challenge. This is one of the strongest arguments for a properly designed chart of accounts, which we cover in the glossary and set up as part of monthly bookkeeping.

Where it usually goes wrong

Assuming the UK treatment applies. Jersey is a Crown Dependency with its own system, and it has GST rather than VAT. The categories are not a copy of the UK list.
Treating exempt as zero-rated. The invoice looks identical, so the error hides until someone asks why input tax was reclaimed on exempt activity.
Ignoring zero-rated sales in the threshold test. They normally count as taxable turnover, so a business can cross the £300,000 registration threshold while believing it is nowhere near.
Software left on UK defaults. Accounting packages ship with 20% VAT codes. If the tax rates were never reconfigured for Jersey, the categories underneath will be wrong too.

Common questions

What is the difference between zero-rated and exempt?

Both mean no GST on the customer's invoice. Zero-rated is a taxable supply at 0%, so input tax is normally reclaimable. Exempt is outside GST, so it generally is not.

Do zero-rated sales count towards the £300,000 threshold?

Normally yes, because they are taxable supplies. Exempt supplies generally do not. Confirm your position on gov.je.

What is the standard rate?

Jersey GST is 5% — the default unless a specific zero-rating or exemption applies.

How do I work out which applies to me?

Assume standard-rated at 5%, then check whether a specific rule zero-rates or exempts the supply. Check gov.je or ask us to review your income streams.

General information, not tax advice. Categories and thresholds are set by Revenue Jersey and change — verify your own position on gov.je or ask a qualified adviser before relying on it.