Government confirms VCS VAT exemption on shared services

As part of the Chancellor's autumn statement, the government has confirmed it will introduce a VAT exemption for VCS organisations that wish to share back-office services, removing the additional VAT charge that can arise when some organisations collaborate. The exemption will apply to services shared between VAT exempt bodies, including charities and universities. A requirement that charities who want to share services must set up a separate legal entity to do so was opposed by the sector but has been retained in the government proposal. The government has also confirmed that people who donate gifts pre-eminent works of art or historical objects to the nation can receive a reduction in their income tax or capital gains tax liabilities, of up to £30million a year overall. In addition, the Chancellor launched a call for evidence on the effectiveness of the TUPE regulations protecting employees' rights and smoothing the process of business restructuring. It said it would formally consult on any changes proposed to the current regulations during 2012. To download the Chancellor's full autumn statement document visit http://cdn.hm-treasury.gov.uk/autumn_statement.pdf.