Other local authority activities: miscellaneous s (A to E): building control fees
The building control system ensures that buildings are properly designed and constructed. Building regulations set minimum standards and apply to most new buildings as well as many alterations to existing buildings. They ensure that buildings are safe, energy efficient and easily accessible to everyone who lives and works in or around them. Local authorities have overall responsibility for overseeing the building controls and for granting planning permission. As part of this regulatory process buildings may be subject to inspections for which fees are payable. Building control structures and their VAT treatment vary within the UK.
England and Wales
In England and Wales local authorities have sole responsibility for processing and approving planning applications along with policing and enforcing the regulations. This is a non business activity and so planning application fees are outside the scope of VAT. However, building inspections may be undertaken by approved inspectors from the private sector. To avoid distortion of competition fees charged by local authority building inspectors are treated as consideration for taxable supplies and so are subject to VAT.
Scotland and Northern Ireland
In Scotland and Northern Ireland responsibility for all forms of building control rests solely with the local authority. This means that, unlike in England and Wales, only local authorities are able to undertake building inspections. As a result there is no potential for distortion of competition with the private sector and so any fees for these activities are outside of the scope of VAT.