Maintenance and capital works

Supplies by a local authority of goods and services to a water company are regarded as a business activity and liable to VAT as appropriate.

Where a local authority undertakes work as agent of a water company it is commonly paid on an annual basis for maintenance works and on a job basis for capital works.

Where payments are made to the authority by monthly instalments, VAT due on such regular payments can be dealt with by issuing an annual schedular invoice rather than by issuing separate invoices for each payment (Value Added Tax Regulations 1995 (SI 1995/2518), reg. 90(2)).

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