How can UK operators benefit from the European VAT cost-sharing exemption?
The VAT cost-sharing exemption has existed in European law for some time and has been put to practical use in many other Member States resulting in significant VAT savings for charities and partly exempt businesses. So far their UK counterparts have yet to enjoy its benefits but HMRC’s plans to consult on the exemption suggest it is now only a matter of time before it is finally introduced here.
Background
Most non-taxable organisations suffer a VAT cost on goods and services they buy in to support their activities. There is however a ready-made provision which should allow charities and partly exempt businesses to reduce the VAT they suffer on bought-in services.
The cost sharing exemption
The cost-sharing exemption can be found in Article 132(1)(f) of the Principal VAT Directive and was also present...
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How can UK operators benefit from the European VAT cost-sharing exemption?
The VAT cost-sharing exemption has existed in European law for some time and has been put to practical use in many other Member States resulting in significant VAT savings for charities and partly exempt businesses. So far their UK counterparts have yet to enjoy its benefits but HMRC’s plans to consult on the exemption suggest it is now only a matter of time before it is finally introduced here.
Background
Most non-taxable organisations suffer a VAT cost on goods and services they buy in to support their activities. There is however a ready-made provision which should allow charities and partly exempt businesses to reduce the VAT they suffer on bought-in services.
The cost sharing exemption
The cost-sharing exemption can be found in Article 132(1)(f) of the Principal VAT Directive and was also present...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
