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VAT and the public sector

Confused about VAT and provision of services to the public sector

Just before I retain a VAT specialist I thought I would try to at least understand enough to phrase my question correctly. So here goes.

A client is providing services to the public sector (Network rail) on what he believes is a VAT exempt basis.  Another client of ours is providing very similar services to the NHS and is charging VAT.  The latter is what I believed the situation to be. Unless you are involved in the provision of hands on medicine the service is non-statutory and therefor VATable (and even then there are arguments around the Rapid Sequence case that make this shaky ground).

The Network Rail client's main advantage over the usual Freelancer seems to be that the fees retained by the agency are VATable and the rest isnt.

The questions, therefore, are; under what circumstances or to which public bodies are supplies of a service to a public body non VATable?  Does it relate to the statotory responsability and definition of business and non-business?  So if I am laying tracks for Network Rail, fixing patients for the NHS or providing content for the BBC this is their core business and therefore the service is non-VATable?

 

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By mrme89
09th Oct 2017 10:47

Perhaps you can tell us what the supply actually is, and who it is made from?

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09th Oct 2017 10:52

You seem to be looking at what happens when Public Bodies make supplies, e.g. whether business/non-business statutory etc.

When Public Bodies receive supplies the general rule of thumb is that they pay and are charged the same VAT as everyone else. There are some variations, some education supplies made to eligible bodies, some things with EU missions and armed forces. But the best assumption to start with is that if you'd charge VAT to Joe Bloggs then you'd charge VAT to UK Plc.

So once you've established there is a supply rather than being the recipient of a grant then normal liabilities tend to follow.

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09th Oct 2017 11:58

The Network Rail question seems to be one of agency and/or value of the supply. Laying tracks is taxable.
Supplies of medical services are exempt, subject to conditions. But, as you suggest, other factors may apply in this case.

You should engage your VAT specialist asap.

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to leshoward
09th Oct 2017 12:38

leshoward wrote:

The Network Rail question seems to be one of agency and/or value of the supply. Laying tracks is taxable.
Supplies of medical services are exempt, subject to conditions. But, as you suggest, other factors may apply in this case.

You should engage your VAT specialist asap.

The 'agency' word has me intrigued....tell me more. I don't mind engaging our VAT specialist, I just find the cost goes down quite a lot if I ask the shortest and most specific question possible.

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to KungFuKipper
09th Oct 2017 12:48

So you want everybody here to do the work for you with f*** all information. If everybody else has got any sense, they will do what I'm doing and tell you to f*** off!

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to Portia Nina Levin
09th Oct 2017 13:31

Tetchy!

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to KungFuKipper
09th Oct 2017 15:41

Re "tetchy"
Not really, that's PNL on a good day.
Its all relative.

Cant help you on the VAT, thats grown up stuff and I am not allowed on that shelf.

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to KungFuKipper
10th Oct 2017 12:49

Agency: Who is doing what, and for whom?
This is determined by a review of the contracts, and the actual practice day to day.
The route of the money may be different, of course.
And, for medical services, the applicability of the exemption may depend on who is the supplier (hence Rapid Sequence).

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