Unfair competition?

VAT exemption available to local authorities providing waste services

The taxpayer provided commercial waste services and was required to charge VAT on them. Local authorities also provided trade waste collection services in their capacity as public authorities but these were exempt from VAT.

The taxpayer argued that local authorities offering trade waste collection in competition with private providers were not doing so as public authorities and should not benefit from exemption. It applied for judicial review of the VAT treatment of local authorities carrying out those services.

The Upper Tribunal found that when a local authority was providing waste collection services to business customers and did so in the performance of its statutory duties those supplies would be ‘activities in which it is engaged as a public authority’ under VATA 1994 s 41A(a). Whether an authority provided the services under its statutory duties would be...