Value Added Tax Act 1994 section 41

Application to the Crown

Section 41 sets out how VAT applies to the Crown and Government departments, including the right for departments to claim refunds of VAT incurred on non-business activities and the broad definition of what counts as a Government department.

• The VAT Act applies to taxable supplies made by the Crown in the same way as it applies to taxable supplies made by any other taxable person.
• Government departments can claim a refund of VAT charged on goods, services or imports where the purchase is not for the purposes of any business carried on by the department, subject to Treasury direction and proper record-keeping.
• Goods or services passed between Government departments are treated as supplies by the providing department, and the same applies to transactions involving the Crown Estate Commissioners.
• The definition of "Government department" is wide, covering the Scottish Administration, the Welsh Assembly Government, Northern Ireland departments, NHS bodies, integrated care boards, NHS England, and a strategic highways company, among others.