Overview: This checklist is concerned with Income (basically Box 3 of the Accounting Statements). Most of the checklist is self explanatory.
18. the VAT treatment of income for Councils is exactly the same as for commercial business, however the nature of most of council income is that their supplies are either zero rated of VAT exempt. There is no VAT on cemetary income, and most hall hire is also exempt. You might need to check hall hire income if the Council is VAT registered. Hire of sports pitches is exempt as long as the Council applies the ‘Block Booking’ Rules which are set out in paragraph 5.4 here. Single bookings of sports facilities are VATable as are any sales of items like food and drinks. Advertising income is also VATable. If you have doubts here just ask me.
19. We should expect to see at least one amount of VAT income from HMRC each year. If the Council is VAT registered we should see 4 receipts.
20. town and parish councils are required to register for VAT if they make VATable supplies, even if they are small value. There is a dispensation for this for supplies up to £6,000. If they make VATable supplies over this then they need to be registered for VAT.
23. For councils who are not VAT registered we should see income in the year that agrees to their claim from the prior year. We should also expect them to provide a draft VAT claim for the year subject to audit. What we are concerned of here is that Council have actually submitted claims and received the income as they should have.