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HMRC internal manual

VAT Government and Public Bodies

HM Revenue & Customs
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Local government partnership programmes: VAT status of supplies involving partnerships

Supplies made

The nature of partnership programmes makes it unlikely that business supplies will be made. However, if business supplies are made then the question arises as to who should account for any VAT due.

Where there is a management board or committee, any supplies will be made by the individual members who will need to consider the VAT consequences and account for tax accordingly. If a legal partnership, limited company or charity is established then that body will need to register for VAT if the value of taxable supplies exceeds the registration limit.

Supplies received

In the majority of cases supplies received by a partnership will be liable to VAT, although some may be zero rated or subject to the reduced rate of VAT under the normal liability rules.

The main costs incurred by partnerships are likely to relate to property. Where this involves construction of a building and the relevant residential or charitable use conditions of item 1, Group 5, of Schedule 8 to the VAT Act 1994 are not met, then the work will be standard rated. Additionally, all alterations are standard rated unless they are carried out on protected buildings which are designed to remain or become dwellings (item 2, Group 6 of Schedule 8). For further information see the Construction manual (VCONST) (external users can find the guidance at

Fuel and power can be supplied to charities at the reduced rate (Schedule 7A to the VAT Act 1994,). However, a charity with business activities that exceed 40% of its overall activities is required to pay VAT at the standard rate on fuel and power used for its business activities. For more information see the Fuel and Power Liability manual (VFUP) (external users can find the guidance at