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Scope of the cost sharing exemption

CSE applies when two or more organisations with exempt and / or non-business activities join together to purchase services on a cooperative basis, and in doing so, form a separate entity, a cost sharing group (CSG), to supply themselves with qualifying services at cost. This ensures that an undertaking that legitimately purchases services to make supplies under one of the social exemptions is not burdened with additional VAT because it cannot purchase such services entirely on its own. This type of arrangement enables the creation of the same economies of scale for smaller businesses and organisations that larger businesses and organisations naturally enjoy. Thus the more members of a CSG there are, the greater the potential savings and lower the costs per member of operating the relevant CSG. The CSG is a separate taxable person from that of its members and is