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In his Autumn Statement today, the Chancellor announced that the proposed exemption for cost sharing arrangements between not for profit organisations will be implemented. The exemption, which has been the subject of consultation since June, will introduce into UK legislation a European provision which allows businesses and organisations engaged in exempt / non-business activities to form groups to achieve cost savings and economies of scale without creating additional irrecoverable VAT. Once formed, the groups are relieved of a VAT charge on certain "intra group" transactions if all the conditions of the exemption are met. These conditions define the types of groups that would qualify, the tests required to meet the non taxable status, the types of costs that may qualify and the method of reimbursement. It is expected that the provisions will be implemented from 1 April 2012.
In other news, the Government will, as expected, remove Low Value Consignment Relief for goods sent to the UK from the Channel Islands from 1 April 2012.
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