VAT News

Leisure Services provision by local councils – Chelmsford City Council case


News is circulating that HMRC has withdrawn its challenge to Chelmsford City Council’s position that its provision of leisure services by a local authority body is a non-business activity as opposed to the current view of HMRC that it constitutes a VAT Exempt supply. It is understood that the council has received notification from HMRC that they will withdraw their challenge that non-business treatment would trigger a “distortion of competition” within the leisure sector. Whilst many councils across the UK had transferred their leisure provision to either commercial providers or leisure trust bodies this news will be welcome across the sector and indeed should any council but particularly smaller councils, at a Town or Parish level, be able to benefit from making a claim for additional VAT recovery in the past four years for sporting related supplies it would be well worth exploring that opportunity.

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