Value Added Tax

Local authorities and other public bodies ― recovering input tax

Produced by Tolley
  • 06 May 2022 08:01

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Local authorities and other public bodies ― recovering input tax
  • What input tax can be recovered by qualifying bodies?
  • Exclusions
  • What input tax can be recovered in respect of taxable business supplies?
  • What input tax can be recovered in respect of non-business supplies
  • What are the conditions for making a claim?
  • What input tax can be recovered in respect of exempt supplies?
  • Insignificance test
  • Agreeing a special s33 calculation
  • Model special s33 calculation
  • More...

Local authorities and other public bodies ― recovering input tax

This guidance note provides an overview of how local authorities and other public bodies can recover VAT incurred on costs associated with their statutory and other non-business activities. Local authorities and other public bodies are generally referred to as s 33 bodies because their ability to recover input tax on these activities is covered in VATA 1994, s 33. A list of these bodies can be found in VATGPB4120 and VATGPB4300.

This note should be read in conjunction with the Local authorities, government and public bodies ― overview guidance note.

For more in depth commentary, see De Voil Indirect Tax Service V2.108, V2.231 and HMRC’s internal guidance VATGPB1000 (VAT Government and Public Bodies).

What input tax can be recovered by qualifying bodies?

Normally businesses and other organisations that only make exempt supplies and / or undertake non-business activities cannot recover input tax incurred on costs associated with these activities. However, special VAT recovery rules apply to s33 bodies which enables input tax incurred on the following to be recovered:

  1. non-business activities

  2. exempt business activities (where the input tax incurred in respect of exempt activities is considered to be insignificant)

  3. taxable business activities where the body is VAT registered (subject to the normal rules)

VATA 1994, s 33; HMRC notice 749, para 4.2; De Voil Indirect Tax Service V2.108, V2.231

In the same way as commercial organisations’ input VAT can be recovered on purchases from UK suppliers, importations of goods, acquisitions of goods in Northern Ireland from

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

There's no margin for error. Think Tax.
Think Tolley.

TolleyGuidance gives you direct access to critical, comprehensive and up-to-date tax information and expertise you can rely on.

TAKE A FREE TRIAL

Popular Articles

Losses on shares set against income

Usually, allowable capital losses can only be set against chargeable gains. If the losses are not fully utilised against gains in the year in which they arise, the excess is carried forward to use against future gains. See the Use of capital losses guidance note for further details.This rule can be

26 Apr 2022 10:41 | Produced by Tolley Read more Read more

Requirement for estate accounts

Duty to prepare estate accountsThe Personal Representatives' (PRs) legal obligation to prepare accounts is set out in Section 25 of the Administration of Estates Act 1925. Their prescribed duties include:when required to do so by the Court, exhibit on oath in the Court a full inventory of the estate

09 Feb 2022 21:29 | Produced by Tolley Read more Read more

Coronavirus (COVID-19) and VAT ― delaying payments

This guidance note covers measures in place to allow taxpayers to defer VAT payments as a result of pressures faced due to the coronavirus pandemic.For an overview of the impact of coronavirus on VAT more broadly, see the Coronavirus (COVID-19) and VAT ― overview guidance note.See also the CIOT

18 May 2022 14:02 | Produced by Tolley Read more Read more