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
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.
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
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
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