HOW DOES VAT APPLY TO SOCIO-ECONOMIC DEVELOPMENT?

VAT is payable on all invoices, including those that support Socio-Economic Development (SED) initiatives. However, the VAT payment on an invoice must not form part of an organisation's SED claim.

The exclusion of VAT for SED claims reflects in point 5.1.7 of the 2008 Verification Manual published as Gazette # 31256. It states: “The Verification Agency should confirm that VAT is not included in amounts claimed where Socio-Economic Development Contributions may include VAT”.

Our Technical Compliance Support Desk is on hand to support members with any VAT-related challenges relating to this element.