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HMRC internal manual

VAT Cost Sharing Exemption Manual

HM Revenue & Customs
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Introduction: Does the exemption apply to outsourced services?

No, the exemption only applies to the recharges, at cost, of services supplied by a CSG to its group members. The exemption does not apply to commercial outsourced services or arrangements that amount to the provision of commercial outsourced services. Such services are generally made by specialist providers to unconnected third parties on a commercial for-profit basis and would not, therefore, meet the conditions of the exemption. They are not ‘cooperative self-supply’ arrangements.