- PFI contract expiries may leave local authorities with assets in poor condition, requiring significant spending on repairs or upgrades.
- This situation poses not only legal and estates challenges but also significant VAT and partial exemption risks.
- The future use of the asset affects VAT recovery; if used for exempt or non-business activities, authorities may face unexpected VAT costs.
- Local authorities should plan early for PFI expiry, considering both maintenance and VAT implications to avoid budget pressures.
- VAT and partial exemption analysis should be integrated into early exit planning, not left until the end.
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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