Treasury written question – answered at on 1 November 2004.
To ask the Chancellor of the Exchequer if he will make a statement on the ability of town and parish councils administering funds on behalf of arm's length projects or organisations which are largely funded by Government to reclaim VAT expenditure incurred on behalf of those projects or organisations.
Local authorities can reclaim the VAT incurred on goods and services they purchase in connection with either their taxable activities or their non-business activities.
There are long-established guidelines on the recovery of VAT when other organisations are involved as well. To qualify for refunds in those circumstances, a local authority should place the order for the purchase; receive the goods or services ordered; be in receipt of a VAT invoice addressed to it; and pay for the purchase from its own funds.
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