½Û×ÓÊÓƵ

Public authorities—UK legislation

VATA 1994, s 41A provides that where a public authority supplies goods or services in the course of activities or transactions in which it is engaged as a public authority then the supplies will be treated as non-business activities (therefore falling outside the scope of VAT)¹.

This is subject to an exception where not charging VAT would lead to a 'significant distortion in competition'². Where such a distortion would occur, the public authority's supplies will be brought back within the scope of VAT.

The legislation also provides that certain kinds of supply are specifically to be treated as being made in the course or furtherance of business unless the supply is on 'such small scale as to be negligible'³. The kinds of supplies falling within this bracket are as follows:

1. Ìý

   •ÌýÌýÌýÌý telecommunications services

2. Ìý

   •ÌýÌýÌýÌý supply of water, gas, electricity and thermal