0370 270 6000

Funding for charity to provide leisure services is subject to VAT

1 March 2012

The First-tier Tribunal has refused an appeal by Aberdeen Sports Village Ltd (ASV) against HMRC’s assessment that VAT was payable on annual funding provided by Aberdeen City Council (ACC) and Aberdeen University (AU) to meet the running costs of ASV, pursuant to a joint venture arrangement.

The tribunal found that there was a supply of services by ASV to ACC and AU, that the funding was consideration for the supply of such services and that there was a direct link between the payers and ASV sufficient to incur a liability to VAT.

This case is a timely reminder of the VAT implications where funding is found to be consideration for a supply of services and not a grant or donation. Given the government’s commitment to promoting the use of charities, social enterprises, mutuals and co-operatives to run public services and the ongoing shift towards public service contracting and away from grant funding, thought should be given to any proposed scheme and its potential tax implications.

Related opinions

Homes England partners with local authorities to boost the levelling up agenda

Homes England, the government’s housing accelerator, has partnered with two local authorities, Greater Manchester Combined Authority and the Association of South Essex Local Authorities, in a new Strategic Place Partnership (SPP) which is designed to align with the government’s levelling up agenda by delivering new homes in the regions.

View blog

80% hours for 100% pay? That’ll do nicely

As has been widely reported this week, some 3,000 UK workers are taking part in a six month trial to assess the viability of a four-day working week without any reduction in their normal pay.

View blog

Local Health Systems: Relationships not structures

The Local Government Information Unit’s Local Democracy Research Centre report, there are calls for a reinvigorated role for local government as leaders of local health systems, to develop and strengthen relationships of trust, transparency and cooperation.

View blog

Right to Work Checks: Changes from 6 April 2022

From 6 April 2022, right to work checks on all migrant or settled prospective employees must be online and checks on British or Irish nationals will be manual (free) or digital (charged for).

View blog

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up