UNW Charity Group: VAT - Cost sharing exemption
After many years HMRC is now very close to introducing into UK VAT legislation an exemption for recharges between certain organisations whose activities are regarded as being non VATable. The main sectors likely to benefit from the introduction of this exemption are charity, education, social housing, finance and insurance.
Without such an exemption where organisations as described above work together or share resource, this often leads to an inadvertent (and expensive) 20% VAT charge payable on the recharge between the organisations, which in the main cannot be reclaimed by the paying organisation and therefore representing an actual cost. This is seen by many as being a financial barrier towards extending collaborative working in non VATable sectors.
Draft (but very brief) primary legislation has been published by HMRC and is expected to be included in the Finance Bill 2012 which is listed for publication by HM Treasury on 29 March. Prior to this date we are also expecting HMRC to publish (draft) secondary legislation and also further guidance on how they consider the new VAT exemption should be applied, and it is hoped that the exemption will finally be in place in June/July this year once the Finance Bill 2012 receives Royal Assent.
The introduction of this exemption should be very well received by affected sectors and is a positive step towards reducing the VAT burden incurred by those sectors where organisations look to pool resource and work collaboratively.
Speaker: Mark Hetherington, VAT Partner.
Other 2012 events
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UNW Charity Group
Jun 20
"Stand Out Applications: How to get your funding bids noticed" with guest speaker, Nikki Wilkinson
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Head & Tails: 2 sides of the (same) coin
May 02
Interactive seminar on employment issues presented by UNW and Muckle LLP
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Employment Tax Epic
Apr 25
Interactive seminar looking at employment taxes and pensions issues.
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Institute of Directors Teesside
Apr 03
Neville Bearpark to lead briefing on RGF Round 3 for member of IoD Teesside
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UNW Charity Group: VAT - Cost sharing exemption
Mar 29
Further developments from HMRC eagerly awaited by charitable and other non VATable sectors
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Institute of Directors Newcastle
Mar 27
IoD Newcastle briefing at UNW on RGF Round 3
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UNW Charity Group
Feb 08
Our first event of 2012 will take place on Wedneday 8 February and will focus on the contentious topic of fraud.
