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HMRC internal manual

VAT Government and Public Bodies

HM Revenue & Customs
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Other local authority activities: miscellaneous (A to E): introduction

It is necessary to distinguish between the section 33 body’s business and non -business activities in order to:

  • determine which activities are subject to VAT
  • the extent to which VAT can be recovered under section 33, and
  • whether there are any partial exemption implications.

It is also important to distinguish between the types of activity when dealing with non-VAT registered authorities who use the VAT 126 procedure to claim non-business VAT (see VATGPB4830). This is because they cannot claim VAT incurred in making business supplies unless they register for VAT.

Activities that do not qualify for non-business treatment take the same VAT liability as those supplied by the private sector, unless a specific provision applies to local authorities, for example in the case of education or sporting services.

This section of the guidance, which is not exhaustive, examines some local authority activities.