Sorry for £171k mistake on VAT
Maidenhead: Finance chief apologises for admin error
A council finance chief says her team made an ‘administrative error’ with regards to VAT payments associated with the Braywick Leisure Centre.
Executive director of resources at the Royal Borough, Adele Taylor, sought to clarify some financial details concerning this year’s council budget at a cabinet meeting on Thursday, September 29.
Royal Borough documents have revealed that an overspend of £171,000 is projected with regards to the new leisure centre, which opened in September 2020 at the cost of £32.8million.
Cllr David Hilton (Con, Ascot & Sunninghill), lead member for finance, said that when the centre was built, the council had an option to either pay VAT on the building itself – or pay VAT on the receipts deriving from the centre.
It chose the latter, an arrangement called ‘opt to tax’; in other words, the council would receive money from the centre’s operator, Leisure Focus.
Speaking at the meeting, Cllr Helen Price (TBF, Clewer & Dedworth East) asked for more information regarding this decision, with Ms Taylor going on to say sorry for an ‘error on our part’.
When asked for clarification on what Ms Taylor was apologising for, Cllr Hilton told the Advertiser that the council’s finance team made a mistake with regards to the budget setting process.
“That [opt to tax] was an option that was chosen at the time on the basis that in the long run, it would be cheaper,” he said,
“In the past two years we have taken account of the fact that we need to pay VAT on receipts [for the Braywick Leisure Centre].
“This year, we put in all the receipts and we should not have done. We actually overlooked the fact that we had paid VAT on those receipts.
“In the past the finance team have picked up that they need to pay VAT on the receipts but this year [they
did not] and that is where you get the apology [from Ms Taylor].”
Cllr Hilton added that this has resulted in the £171,000 overspend – which is essentially the VAT that the council owes the HMRC.
The finance lead said that the cabinet meeting was the ‘first time it has come up’ and ‘threw me a bit’, but claimed it was the council’s aim to ‘always be open and transparent’.