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HMRC internal manual

VAT Government and Public Bodies

Other local authority activities: miscellaneous (F to M): mercury abatement

Background

In 2005, DEFRA introduced a requirement for the removal of mercury from 50% of crematoria emissions. At the same time the concept of cost-sharing was introduced whereby those operators which can install the necessary plant to abate mercury emissions will do so, but the cost is shared with those operators which cannot install this plant.

The Burden Sharing Scheme

The Burden Sharing Scheme is administered by the Crematoria Abatement of Mercury Emissions Organisation Limited (CAMEO). CAMEO operates a trading pool where crematoria with excess tradable mercury abated cremations (Tmacs) can sell them to those which have abated less than the target. The total income received from the Burden Sharing Members is then shared among the Contributor Members once annual trading is complete and after the CAMEO administration charge has been deducted.

VAT treatment

Tmacs are not goods for VAT purposes. For there to be a supply of services for VAT purposes, there must be a direct and immediate link between consideration paid and services supplied in return.

HMRC can see no such link in the case of Tmacs.  Consequently, HMRC accept that at present the amounts paid by Burden Sharing Members into CAMEO’s pool in relation to Tmacs are not consideration for any supplies to them.