Sector VAT Issues
Certain public sector bodies have a very different VAT legal regime to adhere to under section 33 of the VATA 1994 which allow a much wider range of VAT recovery on costs even though those costs relate to their statutory non-business activities. Other public bodies with VAT regulations away from the main business rules include Museums; Galleries, Academy Schools and Hospices.
Different VAT regulations (Section 41) cover Government Departments including the MOD and NHS Trusts. The VAT reliefs here are more specifically drafted and allow recovery on certain "contracted out services". Whilst it is vital for the bodies themselves to understand their VAT recovery entitlements it is also important for commercial providers of goods and services into such section 41 bodies to be familiar with their customers VAT recovery rules when positioning their own offering. This is particularly true of growing life science businesses who are looking at the NHS as being a key market sector in the UK.
It will be important to establish how any VAT changes that arise as we leave the European Union will affect the VAT rules within the UK more generally.
How Centurion can help
Some government departments may be precluded from taking “advice” on their VAT management affairs which means that effective VAT training for their own teams is vital. Preclusion from taking advice does not exclude them from the risk of a VAT inspection nor from assessments and penalties for VAT claimed in error or VAT missed on income. In recent years it has been clear that these bodies have received active and on-going inspections from HMRC teams. This has re-enforced the point that they are not excluded from the need to be VAT compliant.
Centurion's ability to be flexible in how it works with clients across these sectors has been key to our success.
We've delivered VAT training into a number of government departments and undertaken VAT audits on internal processes for non departmental bodies clarifying issues on VAT recovery and property related aspects. In the Life Sciences sector, we've assisted commercial businesses in understanding how the service products they are developing will sit within the VAT recovery structure for their potential NHS clients.
We also have experience of advising NHS bodies themselves on project specific VAT issues. This is particularly important as projects bring in collaboration partners from differing sectors. We have charities working with the NHS as well as University Research teams in collaboration with NHS bodies on specific health research programmes.