HM Revenue and Customs
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VAT: Cost Sharing Exemption consultation launched
A consultation to examine how the European VAT cost sharing exemption might be used by UK businesses and organisations was published today by HM Revenue & Customs (HMRC). It will also explore a framework for its possible implementation. This follows from the statement in the March 2011 Budget that consultation would continue.
If implemented the exemption could remove the VAT charge preventing institutions such as universities and charities from gaining efficiencies by sharing costs with each other.
The consultation document can be found at: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_031398
David Gauke, Exchequer Secretary to the Treasury, said:
“We’d like the views of a wide range of businesses and organisations – particularly those in the education and charity sectors – that have VAT exempt or non-business activities and want to set up cost sharing arrangements. This is a complex relief which could have far reaching impacts across a wide range of sectors and careful consideration of the consultation results will be required.”
1. The VAT Cost Sharing Exemption is a European law provision that allows businesses and organisations making VAT exempt and/or non business supplies to form groups to achieve cost savings and economies of scale. Once formed the groups are relieved of a VAT charge on their supplies if all the conditions of the exemption are met.
2. The consultation will start on 28/06/11 and end on 30/09/11.
3. Postal address and email address to which written responses
can be submitted:
VAT Directorate Team
100 Parliament Street
London SW1A 2BQ
Tel. 020 7147 0058
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