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Cultural heritage charity sought VAT advice for an upcoming capital project and gets an unexpected £10,000 historic VAT saving because of S3TAX expertise.
Client Introduction: The heritage charity located in London, a client of S3TAX, is undertaking a £2.8M refurbishment project to enhance its visitor experience and facilities.
Client Challenge: The heritage charity required analysis of its ability to recover VAT on the refurbishment project to inform the project funder, the National Lottery Heritage Fund (‘NLHF’). Uncertainties around current and future partial exemption calculations meant that the charity, and NLHF, needed to ensure that irrecoverable VAT costs were not only minimised but also budgeted for appropriately.
Solution: S3TAX VAT consultants were engaged to conduct a review of the VAT recovery available to the charity on the project, as well as advise on the potential impact of future activities on the initial VAT recovery. Our team analysed the heritage charity’s current and future activities to identify how much VAT would be recoverable initially and advise on the impact of future activities on the ability to recover VAT, through VAT mechanisms such as the Capital Goods Scheme. We provided a clear and practical report on the VAT recovery available to the charity and the calculations which needed to be performed to adjust that VAT recovery over the following 10 years.
Results: S3TAX’s report identified and addressed future irrecoverable VAT which could be budgeted for during funding discussions with NLHF. Not only does this support the project proceeding, S3TAX also identified an additional £10,000 of reclaimable VAT in historic partial exemption calculations – a welcome surprise for the charity!
Conclusion: This case study not only highlights the importance of expert VAT consultancy for third-sector organisations budgeting large capital projects but also demonstrates the added-value that can be provided too. S3TAX’s in-depth sector knowledge and experience identified an additional £10,000 of unexpected VAT savings by analysing previous calculations rather than relying on the headline values.
Contact S3TAX today to discuss how we can help your third sector organisation optimise its VAT position.