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From Robert Livingston, Director, HI-Arts
John Matthews asks (AP issue 92, 28 February) why budget prices are increasingly shown as inclusive of VAT, to the detriment of consultants? fees. He assumes that all bodies setting such prices are able to reclaim the VAT element fully. Sadly, this is not always the case. Because HI-Arts? core funding is a mix of earned income (with VAT added) and grant aid (without VAT added), we are only permitted by Customs and Excise to reclaim a percentage of output VAT, and every project which we undertake has to be individually assessed as to whether or not any output VAT will be reclaimable. This forces us to err on the side of caution and quote budgets for fees as being inclusive of VAT where the consultancy work concerned is related to one of those projects. No, there has been no change of legislation, just a tightening up of the existing rules.