ADMINISTRATION OF DISABLED FACILITIES GRANT ETC

We arrange grants for various housing renovations and charge a percentage fee for doing so.  We do not invoice the householder but charge the fee directly against capital with the income going into revenue rather than give the householder the money from capital to pay us back.  The capital is paid out of the council's own funds. The practice is to charge VAT on this admin fee.

I can see that VAT would be chargeable if this was done the long way around (and not the shortcut version above) but is there another way to do it to avoid any VAT implications?  Could we just do an internal transfer from capital to revenue and NOT charge the applicant?

Many thanks.

Parents
  • I can only reiterate HMRC's stance following the Ashfield DC decision  -  if you determine a grant and the sum to be awarded to the applicant grantee, the monies so determined then beyond to the grantee hence if a percentage is treated as an agency fee and retained by the grantor local authority, that amounts to consideration paid by the grantee from their own monies, as awarded to them in the grant, back to the grantor local authority, even if in practice the monies never leave the local authority's accounts.....  the only 'solution' might be not to include any amount for agency administration in the grant determined BUT that implies you must do this on all occasions, even if the applicant chooses to manage the works themselves….

Reply
  • I can only reiterate HMRC's stance following the Ashfield DC decision  -  if you determine a grant and the sum to be awarded to the applicant grantee, the monies so determined then beyond to the grantee hence if a percentage is treated as an agency fee and retained by the grantor local authority, that amounts to consideration paid by the grantee from their own monies, as awarded to them in the grant, back to the grantor local authority, even if in practice the monies never leave the local authority's accounts.....  the only 'solution' might be not to include any amount for agency administration in the grant determined BUT that implies you must do this on all occasions, even if the applicant chooses to manage the works themselves….

Children
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