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HMRC internal manual

VAT Supply and Consideration

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HM Revenue & Customs
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Consideration: Payments that are not Consideration: Grants: Hillingdon Legal Resource Centre

In Hillingdon Legal Resource Centre (LON/90/12Y) the trader operated a citizens’ advice centre and received grant funding from a local authority. They argued the payment was consideration for a supply on the basis that there was a condition that required a detailed report and accounts be submitted to the local authority to show the grant was being used as originally intended.

The Tribunal ruled that the conditions were simply good housekeeping to ensure the correct use of the payment. Therefore no supply was made and the grant was outside the scope of VAT.