The implementation of the cost-sharing exemption into UK law provides numerous opportunities for not-for-profit organisations to achieve economies of scale through collaboration, without incurring the additional VAT cost usually associated with outsourcing, Anant Suchak writes.
The cost-sharing exemption (CSE) originates in EU VAT legislation and despite being mandatory for EU Member States only became part of UK law through the implementation of Group 16 to VATA 1994 Sch 9 on 17 July 2012. This followed a prolonged lobbying effort by the third sector and other organisations. The purpose of this new provision is to allow organisations which cannot recover all the VAT they incur to share costs achieve economies of scale and improve efficiencies without incurring additional VAT costs.
Given the current economic and political environment this measure assists greatly with...
