VAT and the public sector – reform of the VAT refund rules

This month saw HM Treasury publish a policy paper exploring how the public and private sectors interact with section 41 of the VAT Act 1994 and setting out the government’s reasons for seeking to reform this section. While this isn’t a formal consultation document, stakeholders are invited to respond with any concerns they have. The paper makes it quite clear that HM Treasury and the government believe that reform is overdue and that their clear preference is to replace the current regime of refunding VAT only for listed outsourced services, with a ‘Full Refund Model’, allowing for VAT to be refunded for both services and goods purchased by relevant bodies.

Source: centurionvat.com

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