Local authorities and other public bodies ― recovering input tax

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides an overview of how local authorities and other public bodies can recover VAT incurred on costs associated with their statutory and other non-business activities. Local authorities and other public bodies are generally referred to as s 33 bodies because their ability to recover input tax on these activities is covered in VATA 1994, s 33. A list of these bodies can be found in VATGPB4120 and VATGPB4300.

This note should be read in conjunction with the Local authorities, government and public bodies ― overview guidance note.

For more in depth commentary, see De Voil Indirect Tax Service V2.108, V2.231 and HMRC’s internal guidance VATGPB1000 (VAT Government and Public Bodies).

What input tax can be recovered by qualifying bodies?

Normally businesses and other organisations that only make exempt supplies and / or undertake non-business activities cannot recover input tax incurred on costs associated with these activities. However, special VAT recovery rules apply to s33 bodies which enables input tax incurred on the following to be recovered:

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