VAT & Grant Funding

morory7 Registered Posts: 6
Hi, Our company has been awarded a capital grant from the council for smarter travel. The grant is for £4,000, we have to post copies of the receipts and then the grant will be paid. We are a VAT registered charity and my manager has asked if, when she is calculating the spend does she include VAT on the purchase's or not, I would say not and we would reclaim them as input tax, so the total grant amount would be exclusive of any VAT. Is this correct???? I have tried to contact the council and await a return call. Any advise would be greatly appreciated. Many thanks.


  • morory7
    morory7 Registered Posts: 6
    Thank you mrme89, we have looked at them and all they say is that it is a "capital grant", no other help. The council have now returned my call and are unsure, the contact person is going to check with their manager and get back to me. Many thanks. ☺
  • stevef
    stevef Registered Posts: 258 🎆 🐘 🎆
    Usual local authority grant rules are that the grant to the local authority is outside scope. So the treatment depends on the recipients VAT status. The grant is a lump of cash given for the defined purposes to cover expenditure. If the recipient can claim the VAT back from HMRC (assuming the activity is not an exempt activity) they should do so that the grant goes further. If the recipient is not registered or the activity is exempt, the VAT gets set against the grant so less can be done with the grant.
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