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HMRC internal manual

VAT Government and Public Bodies

HM Revenue & Customs
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Section 33 bodies: refund claims: frequently asked questions

The following questions and answers illustrate potential queries involving un-registered bodies.

1. Is VAT recoverable on play equipment purchased by a local playgroup using money given to it by the un-registered body?

No. The goods are not ordered or received by the un-registered body. Neither will it have a VAT invoice.

2. Is VAT recoverable on play equipment purchased by an un-registered body from its own funds which is used by a local playgroup at no charge?

Yes. The VAT has been incurred in a non-business capacity and the relevant conditions (see VATGPB4415) are met. (The VAT would also be recoverable if the equipment were given to the group without recovering the cost from anybody.)

3. Can an un-registered body claim VAT on repairs to a village hall that it owns?

Yes. So long as the relevant conditions are met (see VATGPB4415). (See also VATGPB4440 and VATGPB8375)

4. Can an un-registered body claim VAT on purchases made out of trust funds in connection with a village hall owned by a trust of which the body is the sole trustee?

Yes. But only as a concession (see VATGPB4450). It may be necessary for the un-registered body to provide documentary evidence of their trustee status.

5. Can an un-registered body claim VAT on purchases made out of trust funds in connection with a village owned by a trust of which the body is a custodian trustee?

No. Although it is common for a parish council (as a continuing body) to be named as custodian trustee, responsibility for providing and maintaining the village hall does not rest solely with them.

6. Is VAT recoverable by an un-registered body that buys a television for a local authority nursing home, from funds raised by the local scout group for that purpose?

Yes. Subject to the conditions at VATGPB4445 being met as the funds have been donated for a specific purpose.

7. Is VAT recoverable and is VAT chargeable on commemorative tankards purchased for sale to local people?

No. VAT is not chargeable on the sales (but see VATGPB4250 and VATGPB4920 for the special rules relating to the registerability of local authorities). As no output tax is due, neither can the VAT be claimed. The same may arise involving business gifts over £50. Again no output tax is due and no VAT is recoverable.

Some gifts may be supplied in a non-business capacity. No output tax is due, but VAT is recoverable subject to the normal rules. (See also VATGPB8638).

8. Can an un-registered body recover VAT on the running costs of a hall for which it receives exempt income?

Yes. So long as the amount is insignificant (see VATGPB4860). (It may be claimed that some expenditure, although not strictly in connection with non-business activity, is of general benefit to the community so that VAT should be refundable. Examples include village fetes, stocking the village hall bar and so on. However, any claims should be refused as these are taxable business activities.)

9. An un-registered body has shown an amount of output tax on their claim. How should this be treated?

No. Output tax is not due (see VATGPB4820).

10. Can a refund be claimed on a purchase for which the VAT invoice is not addressed to the claimant?

Yes So long as all other conditions are met (see VATGPB4425).