Response to HMRC consultation on VAT: cost sharing exemption

The HMRC consultation on the VAT cost sharing exemption has the potential to be a significant benefit for housing associations.

3 October 2011

The National Housing Federation welcomes the Government’s aims to facilitate collaborative working across the housing association sector by introducing the VAT cost sharing exemption. There are already many examples of housing associations involved in cost sharing arrangements to save costs but we know that many more are unable to do so because it would create an additional VAT charge.

The Government needs to ensure that there is sufficient flexibility in the arrangements to enable as many organisations to benefit from the exemption as possible. This means ensuring that the proposals are commercially and legally achievable and that the administrative burden of complying with this exemption is not too significant a barrier to make this proposed legislative measure a benefit for housing association.