VAT Status for the Four Welsh “City Deal” bodies clarified

News today of a short consultation announced by HMRC on the VAT treatment that these four entities across Wales will be able to operate under. VAT has its complexities we all appreciated and is no less an issue for local authorities or public bodies. A local authority entity is allowed under existing VAT legislation to recover all the VAT it incurs on its costs where those costs support its non-business/statutory activities. That ability is a huge benefit to the sector and is in contrast to other organisations, including the vast majority of charitable bodies (certain exceptions do exist) and entities like Further Education Colleges that engage in non-business activities.



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