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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): dropped kerbs and carriageway crossings

It may be necessary for an occupier to drive a vehicle over a kerbed footpath or verge in order to access their premises. The local authority, acting in its capacity as highway authority, can serve a notice under section 184 Highways Act 1980 to construct a dropped kerb. The notice will seek reimbursement from the occupier for the cost of the works. This is a non-business activity and so is not chargeable with VAT.,

Alternatively a local authority may write to the occupier pointing out that a carriageway crossing is necessary, but giving the occupier the option of making arrangements for the work to be carried out before the issue of a notice. If, despite this, the local authority itself eventually carries out the work it is regarded as a business activity and is taxed at the standard rate. This is because the local authority is not acting under a special legal regime.

On the other hand, the occupier themselves may request the highway authority to carry out the work without a notice being issued. In that event the supply is non-business as the authority must carry out the work when asked.