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VAT on Community Fibre Partnership?

PAS

Member
Hi, my small community is just about to contract with Openreach for FTTP under a Community Fibre Partnership. One of the Openreach requirements is they must contract with a legal entity.

One of our community has a company that they have agreed we can contract through, however at the last minute we have hit a question re VAT.

The Openreach contract they have issued shows VAT as N/A. The company contracting on our behalf is VAT registered and is concerned they will have to add VAT to the invoices they will be creating for each residents contribution.

Has anyone hit a similar issue? If so, how did they get around this?

Thanks
 
I do not believe that the company contracting on your behalf would need to charge each resident VAT. This is because the contracting company is making a payment to a supplier (Openreach) on behalf of its customers (residents) and so this would likely be classed as a disbursement. Since no VAT was charged by Openreach there is no VAT to pass on to the residents.

You can read more information about disbursements and VAT on the government website (https://www.gov.uk/guidance/vat-costs-or-disbursements-passed-to-customers).
 
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No problem. It would be wise to run this by the contracting companies accountant just to be 100% certain but I can't imagine there would be a problem.

Good luck with the CFP!
 
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