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HM Revenue and Customs Brief 23/12

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Issued 24 August 2012

Guidance on Cost Share Group Exemption - Group 16, Schedule 9 of the VAT Act 1994

Introduction

This Brief announces the introduction into law of a new group 16 to Schedule 9 of the VAT Act 1994. This follows the receipt of royal assent of the Finance Bill on 17 July 2012.

The new group 16 to Schedule 9 to the VAT Act 1994 deals primarily with the Cost Sharing Exemption provision.

Background

The exemption applies when two or more organisations (whether businesses or otherwise) with exempt and/or non-business activities join together on a co-operative basis to form a separate, independent entity, a cost sharing group (CSG), to supply themselves with certain services at cost and exempt from VAT.

The exemption applies to supplies of certain qualifying services that are made by the representative member of the CSG to other members of the CSG. These supplies must be 'directly necessary' for the exempt and/or non-business supplies made by the individual qualifying member.

Who needs to read this?

All independent businesses and organisations which have VAT exempt and/or non-business activities and may wish to set up a cost sharing arrangement with other independent businesses and organisations.

What is being published?

HM Revenue & Customs (HMRC) is initially publishing its guidance in VAT Information Sheet 07/12 which explains how the exemption can be enacted. This guidance will be incorporated as soon as possible into HMRC's appropriate book of guidance.


About the Author

Crown Copyright 2012.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.



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Article Published/Sorted/Amended on Scopulus 2012-09-05 13:14:31 in Tax Articles

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