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HMRC internal manual

VAT Government and Public Bodies

Other local authority activities: housing and community projects: planning regulations

Planning, building notice, inspection and reversion fees

Although local authorities in England and Wales are obliged to undertake building control work they do not have a monopoly. There is private sector involvement in certain domestic works and there are private sector ‘approved inspectors’ who carry out non-domestic work. As a result building control fees are standard rated. However, in Scotland and Northern Ireland authorities continue to have a statutory monopoly so their building control fees remain non-business. All local authorities retain their statutory monopoly over planning applications and reversions and so the fees they charge are non-business.

Regularisation fees

Where required anybody carrying out building work must first obtain approval from the local authority. However, the authority may also consider a building application retrospectively and can issue a regularisation certificate on payment of the appropriate fee. Approved inspectors in the private sector do not have the legal power to carry out this function so the authority can treat the charge as non business.

Pre-application services

Under the Town and Country Planning (Pre-Application Services) Wales Regulations 2016, Welsh local authorities have a statutory requirement to provide applicants with a written response within a certain amount of time.  The amount they may charge for this is set by the Department for Natural Resources. 

These pre-application services can be treated as non-business and outside the scope of VAT by the planning authorities, on the understanding there are no commercial competitors who could deliver this service.