Decision details

Members considered the Fenland Future Ltd Service Level Agreement report presented by Peter Catchpole.

Councillor Boden said the agreement anticipates that there will be quarterly charges raised in arrears and he asked if it will be necessary to have a backdated set of invoices going back to beginning of the operation of the company. Peter Catchpole confirmed it will be necessary, there are accruals in both sets of accounts for costs incurred to date by both Fenland District Council (FDC) and FFL so it will be backdated to when FFL was first incorporated.

Councillor Boden queried the VAT status of FFL, the relationship between FDC and FFL and how it relates to service charges. Peter Catchpole responded that FFL is a registered entity for VAT, so FDC will have to charge VAT to FFL on these services, but FFL should be able to reclaim the VAT.  Councillor Boden thanked Peter Catchpole but asked why it was decided to have two separate VAT registrations rather than absorb FFL into FDC’s registration assuming that is legal. Peter Catchpole replied that officers had investigated several options and taken advice, they wanted FFL to be part of a separate VAT group because it is one limited company but depending on how we deliver going forward, this seemed to be the most advantageous way of doing that. 

Councillor Benney said if there was a specific project being looked at where the VAT implications would be different, another company could always be set up to run that project through with a different VAT scheme. Peter Catchpole replied that the most tax efficient way of doing things for any project would certainly be examined, and a number of options for how we deliver things through FFL are currently being looked at.

Councillor Boden asked how often VAT registration for FFL is reported. Mark Saunders replied FFL is reported quarterly and FDC is reported monthly. Councillor Boden asked officers to ensure that we do not end up with a timing difference that is disadvantageous to the entity as a whole.

The Investment Board AGREED to approve the draft Service Level Agreement at Schedule 1 of the report.