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HM Revenue and Customs Brief 21/13


HM Revenue and Customs -Tax Authorities

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Issued 30 July 2013

VAT: withdrawal of the VAT exemption for supplies of research between eligible bodies - announcement on transitional arrangements

Purpose of this Brief

The purpose of this Brief is to announce the transitional arrangements that will be implemented following the withdrawal on 1 August 2013 of the VAT exemption for research services between eligible bodies.

Who should read this brief

Eligible bodies who supply business research services and those that commission research from eligible bodies.


The UK received notification from the European Commission that its exemption for business supplies of research between eligible bodies does not comply with European legislation. The UK has accepted that this is the case and will withdraw the exemption with effect from 1 August 2013.

HM Revenue & Customs published a consultation December 2012 to gather information to allow them to assess more accurately the impact that the withdrawal of the exemption would have and to establish whether there were any possible options to mitigate that impact.

Transitional arrangements

The withdrawal will apply from 1 August 2013 to all written contracts that are entered into on or after that date.

The Government wants to mitigate the impact of the withdrawal of the exemption on supplies under existing contracts entered into before 1 August 2013.

For supplies of business research where the written contract was entered into before 1 August 2013, whether or not work has already commenced, the exemption will continue to apply to services within the scope of the contract.  

The Government believes that these transitional arrangements will reduce the administrative burden on those bodies affected by the change.

Further information

VAT Information Sheet 11/13 is intended to assist those affected in distinguishing when a contract may be outside the scope of VAT or exempt from VAT. It will also explain in more detail how the transitional arrangements are intended to work and the restrictions on the scope of the arrangements.

Responses document

The consultation responses document will also be published shortly on the GOV.UK website.

About the Author

Crown Copyright 2013.

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 2013-08-08 09:05:12 in Tax Articles

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