Letter from Treasury Officer of Accounts
to the Clerk of the Committee
Question 120 (Mr Richard Bacon): VAT payments
on outsourcing
At the hearing, Mr Bacon asked me when the government's
work on VAT payments on outsourcing might reach a conclusion.
I am afraid I cannot add very much to what the
NAO Report says at paragraph 4.6.
I understand that the Treasury has been working
with the Cabinet Office to gather evidence on the scale of any
VAT issue and then to consider how to address the implications
for the take up of shared services. The Treasury has recently
written to government departments to gain further evidence on
the extent of current and potential service sharing and outsourcing
among NDPBs.
This information will be factored into the Chancellor's
decisions on tax as part of the budget cycle in the context of
the overall budget package. You appreciate I cannot really add
any more information about that.
It may be helpful to add that ministers would
wish to ensure that any changes should not disturb the principles
governing how government bodies are funded. For higher and further
education institutions, which are charitable bodies, Ministers
will wish to ensure that any changes are fair to the charitable
sector as a whole and consistent with the conclusions of previous
reviews of charity taxation.
I am sorry I cannot be more helpful
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