HMRC Updates Guidance on VAT Recovery for Local Authority Election Expenses

• Elections have been a significant topic in local authority VAT matters.
• HMRC updated guidance on VAT recovery for election expenses by local authorities.
• VAT can be recovered for elections organized for another local government tier.
• No VAT is added to recharges for these election expenses.
• VAT recovery is not allowed for Parliamentary or Police & Crime Commissioner elections.
• Uncertainty existed when purchasing items for multiple election types.
• HMRC updated guidance after discussions with the Elections Funding Unit.
• Revised guidance allows full VAT recovery for costs related to both local and other elections.
• Previously, irrecoverable VAT might have been passed to the Consolidated Fund or borne by the authority.
• Unjust enrichment rules may apply if irrecoverable VAT was passed to the Consolidated Fund.
• No correction mechanism exists once a recharge claim is settled from the Consolidated Fund.
• Unjust enrichment does not apply if the local authority bore the irrecoverable VAT.

Source: pstax.co.uk

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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