Local Authorities potential to reclaim VAT
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28th February 2013
The Tax Tribunal has recently heard a test case brought by a
Local Authority against HMRC relating to cemetery memorial charges. The
council involved has over £1m of VAT and
the First Tier Tribunal has sided with the council in its case.
Sandwell Council had argued that it was incorrect to collect
VAT on personal memorials where they were clearly connected with
of a deceased person. HMRC had argued
that the memorials were a focal point for remembrance and as such
subject to VAT. The Tribunal agreed with
HMRC insomuch that they are a focal point, but considered that the
wanted a fixed location they could identify with the deceased. As such,
the Tribunal considered this to be
an item of immovable property, and any standard rated works that took
such as engraving of the memorial were an incidental part of the supply.
As the £1m that Sandwell is looking to reclaim shows, the
values involved are not small, and it would be worthwhile looking at
claim in to cover the last four years for all local authorities. Whilst
HMRC may still appeal the Tribunalís
decision to a higher court, capping rules would limit any reclaim
if an authority delayed.
About the Author
VAT People are leading VAT and Customs Duty
consultants based in the
North West of England. We work with a wide range of businesses
throughout the UK as well as assisting our accountancy colleagues to
unravel the thorny VAT issues for their clients. We are one of the UK's
largest and most comprehensive sources of VAT and Customs advice, our
consultancy team having over 140
years of experience in VAT and Customs
gained in either HMRC or a Big 4 accountancy practice environment.
Call us on our VAT helpline 0800 077 4604 to discuss. All initial discussions are free with no-obligation.
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Article Published/Sorted/Amended on Scopulus 2013-05-18 11:13:35 in Tax Articles