The introduction of a new VAT exemption for cost-sharing arrangements is a welcome development. After years of pressure from charity groups and other organisations HMRC recently completed a consultation exercise on the introduction of the new exemption.
This has now resulted in draft Finance Bill clauses and new HMRC guidelines are expected to be issued for comment in the coming weeks.
Of course this move is not purely a result of altruism on the part of HMRC. EU law has contained a mandatory exemption for cost sharing arrangements since the 1970s although the fact that British courts have not been asked to enforce it over the last three decades perhaps gives an important clue...
