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HMRC internal manual

VAT Cost Sharing Exemption Manual

How the conditions are to be interpreted: Number of members and memberships: Will HMRC put any special process or compliance arrangements in place?

HMRC will not initially be introducing any bespoke process or compliance arrangements in respect of the exemption. However, where businesses and organisations require confirmation that their arrangements satisfy the conditions of the exemption HMRC will, where requested, provide advice in line with its standard policy.

In terms of compliance activity, HMRC deploys its resources according to risk and use of the VAT Cost Sharing Exemption will be built into risk profiling in the same way as other aspects of the VAT regime.

The primary legislation, introducing the exemption into UK law, also contains provision allowing HM Treasury to make regulations in respect of the operation of the exemption. These powers have not been immediately exercised though the operation of the exemption will be monitored and assessed to see if regulations are required in order to ensure its smooth application.