Update on VAT exemption for service charges

HMRC published a briefing last year on the VAT exemption provided under the service charges concession rule change. This update from Deloitte outlines how exemptions could apply under different provisions for those providers who are no longer VAT exempt.

An article that we published last year discussed HMRC’s new guidance on the VAT exemption provided for under the “service charge concession”. 

The guidance has required managing agents to begin charging VAT in certain circumstances from November 2018. Following discussions with certain providers, we thought it important to point out that if managing agent services are no longer subject to VAT exemption as a consequence of this guidance, it may still be possible for them to be exempted under different VAT legislative provisions (such as the exemption allowed for welfare services for example). 

Each set of services needs to be considered closely to determine how VAT applies – if you have any questions or would like to discuss, please contact us.