We were recently asked to provide VAT advice on the redevelopment of an existing mental health Trust building into a museum and archive centre, to be operated by an associated charity.
Our work involved advising on the VAT implications and treatment of:
- Supplies by the Trust to the charity – reviewing the revision of Section 41(A) VAT Act 1994 to determine whether transactions were business supplies or outside the scope of VAT.
- Museum Staff – reviewing the employment status and payment of salaries to determine whether there are supplies of staff between the entities or whether employment status meant that transactions were outside the scope of VAT.
- VAT incurred by the Trust on the redevelopment/refurbishment works – to determine whether VAT incurred was recoverable as business input tax, blocked from recovery, or eligible for recovery under the appropriate COS regulations.
- Charitable Funds – Zero Rating
- VAT treatment of supplies by the Charity
Our work resulted in the Trust and Charity successfully mitigating several £100K of VAT costs.