Reigate and Banstead council’s new transfer organisation has admitted defeat in its attempt to benefit from new VAT rules on repairs, losing £6m.
RB Housing Trust had hoped to be the first to profit from a change in government rules which meant that transfer organisations could reclaim VAT (Housing Today, 14 February). The move would have saved the trust £6m on its £35m programme.
The new arrangement allows councils to be responsible for programmed repairs, reclaiming the VAT paid. The transfer organisation becomes the subcontractor to carry out the work.
With this tax now disregarded in calculation of the transfer levy, the financial balance of some transfers could be improved.
But the changes came too late for Reigate and Banstead, where a 5,000-home transfer went through last month.
Resources director Willem Buttinger said: “We just couldn’t get everyone on board in time. This is a big disappointment because it is £6m thrown away.”
Source
Housing Today
No comments yet