VAT registration
In theory, if a local authority makes any taxable supplies, it must register for VAT. In practice, HMRC is unlikely to insist on registration if the amount of VAT involved is small. However, this is an important point for parish and town councils who might not have considered the issue.
VATA 1994, s 33, provides for refunds for VAT in certain cases. Notice 749, section 12, explains the VAT refund claim process for public bodies that are not registered for VAT.
Private funds
Private funds, for example bank accounts kept by a school 'Parent Association' to raise funds for the school are not seen as part of the local authority and will, therefore, fall outside of s 33. The private funds fall under the general provisions within VATA 1994 and may be liable to register for VAT in their own right if taxable supplies exceed the annual VAT threshold.
Funds raised in a private fund account may be donated to the official accounts of the local authority and
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Web page updated on 17 Mar 2025 14:57