Section 197 | Exempt supplies

(1)In Part 1 of Schedule 9 to VATA 1994 (index to exempt supplies of goods and services), at the appropriate place in the table insert—

.

(2)In Part 2 of that Schedule (the groups), at the end insert—

1Item No

(a)each of those persons is a person who is carrying on an activity (“the relevant activity”) which is exempt from VAT or in relation to which the person is not a taxable person within the meaning of Article 9 of Council Directive 2006/112/EC,

(b)the supply of services is made for the purpose of rendering the members of the group the services directly necessary for the exercise of the relevant activity,

(c)the group merely claims from its members exact reimbursement of their share of the joint expenses, and

(d)the exemption of the supply is not likely to cause distortion of competition.

(3)In section 31 of that Act (exempt supplies and acquisitions), after subsection (2) insert—

(3)The Treasury may by regulations make an exemption of a group 16 supply of a description specified in the regulations subject to conditions.

(4)Regulations under subsection (3) may—

(a)make different provision for different cases, and

(b)make consequential or transitional provision (including provision amending this Act).

(5)In subsection (3) “group 16 supply” means a supply falling within Group 16 of Schedule 9.