Graham Elliott, VAT expert at City & Cambridge Consultancy on the definition of grants and services in recent HMRC guidance, membership subs in Harley-Davidson, advanced learner loan rules clarified
‘Grants’ and ‘services’
HMRC has published significantly enhanced guidance on the issue of whether funding received by non-profit bodies from public bodies (though the principles go wider than that class of funder) are ‘grants’ in the true sense (gifts of funding) or ‘consideration’ (for services provided to the funder). The guidance is now found in the HMRC manual on VAT Supply and Consideration at VATSC51600 to VATSC51900. It adds greatly to what was previously very thin policy guidance. The position is now discussed in the detail it deserves.
Non-profits and practitioners alike will wish to read the guidance, but they will not find new revelations, or startling changes in what they are used to. They will find, instead, a broad description of the factors that VAT inspectors will apply, and which are similar to those applied by most advisers and auditors over the years.
