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HMRC internal manual

VAT Government and Public Bodies

HM Revenue & Customs
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Other local authority activities: miscellaneous (F to M): memorial benches

Friends and relatives of deceased persons often collect money for donation to a local authority to buy a memorial item, such as a bench, to be sited in a public amenity area. The local authority retains ownership of the bench and, provided certain conditions are met, the authority can recover any VAT incurred under section 33 (see VATGPB4445).

Where the conditions are met any income from donations to the authority to place a plaque or inscription on the bench can be treated as non-business.

This applies even where the authority will only buy a memorial item for a stated ‘price’ covering the cost to the local authority of the memorial item. Funds given by friends and relatives of deceased persons to the authority in these cases may be treated as outside the scope of VAT where the following circumstances prevail:

  • The local authority places the order, receives the supply, uses money (including contributions) that belongs to it and receives a tax invoice in its name
  • The local authority retains ownership of / title to the item
  • The local authority’s stated ‘price’ is a suggested value that meets only the cost of the item
  • The contributing party receives no direct benefit in return for their contribution i.e. exclusive use or rights
  • The memorial plaque or certificate does nothing more than acknowledge the contribution and does not promote a business interest