Supply and consideration ― grants and subsidies

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at grants and subsidies for VAT purposes. In particular, it considers when a payment will be consideration for a supply and therefore potentially within the scope of VAT.

For an overview of supply and consideration generally, see the Supply and consideration ― overview guidance note.

For in-depth commentary on the legislation and case law in this area, see De Voil Indirect Tax Service V3.104.

Is a grant consideration for a supply?

It is often assumed that grants are not consideration for a supply and they are therefore outside the scope of VAT. However, the position is more complex than this. HMRC will not see the fact that something described as a ‘grant’ is determinative of its VAT status. Some grants will be outside the scope of VAT, whilst others will be within the scope of VAT.

At a basic level, it is necessary to look at the substance of the ‘grant’ on a case-by-case basis. If the grant is freely given and nothing is given in return, then

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Personal Tax

Payment of tax due under self assessment

Payment of tax due under self assessmentNormal due dateIndividuals are usually required to pay any outstanding income tax, Class 2 and Class 4 national insurance, and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2025 for the 2023/24 tax year).

14 Jul 2020 12:52 | Produced by Tolley Read more

Corporation Tax

Foreign exchange issues

Foreign exchange issuesOverview of foreign exchange provisionsForeign exchange (FX) movements are generally taxed following the rules applicable to the underlying income, expenditure, asset or liability on which they arise, broadly as follows:Capital assetsOn a realisation basis (ie on disposal)

14 Jul 2020 11:44 | Produced by Tolley Read more

Employment Tax

Fuel-related payments / mileage payments

Fuel-related payments / mileage paymentsIntroductionMost employers will make payments to employees in relation to business travel. Among the most common payments in relation to business travel are fuel and mileage payments. If an employer does not reimburse these amounts, then the employee will be

14 Jul 2020 11:46 | Produced by Tolley in association with Philip Rutherford Read more

��Ƶ