VATGPB9750 - Government departments and health authorities: Contracted Out Services (COS) Headings: COS Heading 1 - Accounting, invoicing and related services
The full heading reads: Accounting, invoicing and related services including the preparation of financial accounts, statements and professional advice intended to assist in compliance with tax obligations but excluding external audits and services relating to arrangements the main purpose, or one of the main purposes of which is to obtain a tax advantage.
This Heading concerns the outsourcing of all, or part, of an accounts department although it also covers the procurement of the type of services which would have been undertaken by an accounts department. The exclusions are functions which either had to be procured from external accountants or have since evolved as services supplied by external accountants. It would not include VAT incurred on external audit fees as, by their very nature, they would never have been performed in-house so could not be contracted out.
The 2020 change to the heading explicitly excludes any external audits or services where the arrangements include an intention to obtain a tax advantage. These items have always been excluded from this heading but were not previously made clear.
Includes
- Accountancy services which include general record keeping, invoicing and preparation of tax returns and other related supplies
- Preparation of financial accounts and/or statements and accountancy advice
Excludes
- External Audit fees
- Tax planning advice - for further information refer to VATGPB9450. The guidance referred to sets out HM Treasury’s view of the use of tax advisors and tax avoidance, and how they relate to use within government departments and NHS bodies.
Additional information
Internal audit reports - these deal with efficiency and any VAT incurred can be recovered under heading 52.