Business Improvement Districts (BIDs) are a partnership between local authorities and local businesses to provide additional services or improvements to a specified area. This is funded in whole or in part by a levy additional to the non-domestic rates.

The former Office of the Deputy Prime Minister (ODPM) confirmed that BIDs do not fall within the VATA 1994 definition of a local authority and so are not eligible for the refunds of VAT under VATA 1994, s. 33 (¶51-065).

HMRC have subsequently clarified the position of BIDs in relation to VAT as follows.

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