CSE1060 - Introduction: Application of the Cost Share Exemption to Social Housing Organisations: General Position

Revenue and Customs Brief (RCB) (8) issued on 27 August 2019 announced that HMRC had completed its review of the application of the cost share exemption (CSE) to the social housing sector.

HMRC noted that the Court of Justice of the European Union (CJEU) in DNB Banka AS (Case C-326/15) concluded that the CSE only applies to independent groups of persons whose members carry on an activity in the public interest. The CJEU was concerned specifically with financial services and did not consider the treatment of social housing associations which make rental supplies which are also in the public interest. In the absence of a court judgment relating specifically to them, HMRC considered that the existing arrangements should continue for social housing associations

The RCB therefore announced the continued application of the CSE to cost sharing groups (CSGs) implemented by social housing associations.

Housing associations as defined in CSE 1065 and their corporate groups can continue to use the cost share arrangements subject to the conditions set out in CSE 1075.

If further changes are required, HMRC will give 12 months’ notice. Any changes would not have retrospective effect.