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HMRC internal manual

VAT Government and Public Bodies

Other local authority activities: miscellaneous (F to M): mayoral and chairman’s expenses

Although a mayor or chairman is an elected councillor they are, for VAT purposes, treated as an employee when carrying out their official duties. As a result any VAT incurred in the course of their official duties can be recovered subject to the following conditions:

  • the local authority accepts responsibility for the actual expenses incurred and includes them in its normal accounts
  • the goods or services are ordered in the name of the authority and invoices are addressed to it, and
  • adequate documentation is retained to support the claim for refund of the VAT.

Where a mayoral car is used for transport between the mayor’s home and civic events the related motoring expenses can also be recovered subject to the same conditions. If a car is made available for the mayor’s private use VAT recovery on its purchase is blocked.

VAT cannot be recovered where it is incurred through expenditure of a flat rate allowance provided in the form of money placed freely at the disposal of the mayor or chairman.