VAT
Councils are currently addressing the financial implications of recent VAT changes on leisure service contracts.
Barking and Dagenham Council's cabinet approved a change to its leisure contract in August 2025, moving to an 'Agency Model' with SLM Limited. This decision, following an HMRC VAT ruling that designates local authority leisure provision as non-business, is expected to generate an extra £260,000 annually by allowing input VAT recovery and not charging output VAT.
Meanwhile, Greenwich Council's library and leisure review, part of a wider savings programme, has been delayed. A July 2025 report stated that changes to Value Added Tax (VAT), a consumption tax levied on goods and services, and ongoing negotiations are hindering contract amendments, affecting £780,000 of planned savings.
Key facts
- Barking and Dagenham Council's cabinet approved a leisure contract change on 19 August 2025. Source
- The change is expected to bring Barking and Dagenham Council an extra £260,000 per year in income. Source
- This followed an HMRC VAT ruling designating local authority leisure provision as non-business. Source
- Greenwich Council's library and leisure review was delayed due to VAT changes and negotiations. Source
- £780,000 of Greenwich Council's savings for 2024/25 are affected by the delay. Source
About this summary
This summary was written automatically from our published stories and the council meeting records they draw on. It describes what councils have discussed and decided; it does not take a view on any decision. Each key fact links to the story it comes from. Updated 30 September 2026. Spotted a mistake? Email community@opencouncil.network.