VAT cost-sharing exemption
When universities and colleges share services, these activities often attract Value Added Tax (VAT). The payment of this tax can have the effect of eliminating the cost savings of sharing the services.
In the March 2010 Budget Statement the Chancellor of the Exchequer announced that the Government would work with charities and other affected sectors to consider options for implementing the European Union cost-sharing exemption to address the potential barrier that VAT represents to developing shared services.
Guidance on the Cost Sharing Exemption, which supplements the legislation, has now been issued by HM Treasury.
Guidance on the application of the provisions of the new legislation is currently being drafted by HEFCE in consultation with the sector and in collaboration with the British Universities Finance Directors' Group (BUFDG) and Universities UK. It will be published in March 2013 and will be launched at an event to be held by Universities UK in Spring 2013.
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