Agenda item

RESOLVED that 1) the Council takes a transfer of the Roseland Park land as shown edged red on the plan attached to the report from Shirebrook Town Council for nil consideration,

2) the Council grants a lease of Roseland Park and crematorium for a peppercorn rent on terms to be agreed by the Council’s Chief Executive,

3) the Council enters into an agreement with the LLP setting out how the LLP will operate the crematorium rent on terms to be agreed by the Council’s Chief Executive, in consultation with the Director of Finance & Section 151 Officer,

4) the Director of Finance & Section 151 Officer’s decision to opt to tax the crematorium, in order to protect the Council’s partial exemption position, be approved.

Executive considered a detailed report which provided an update on the partial exemption and VAT position of the Council, and the next steps in relation to the lease of Roseland Park and Crematorium in line with expert advice provided on the

VAT partial exemption calculation.

The report sought Member’s approval for the transfer of the Roseland Park land to the Council, to enter into an agreement with the Shirebrook Crematorium LLP (“LLP”) setting how the crematorium will be operated by the LLP and the subsequent lease of the land and crematorium to the LLP. Members were also asked to approve the Section 151 Officer’s decision to opt to tax the crematorium.

The Council would be investing £9.2million into the construction of a new build crematorium and wake facility, over the next 18-months, with work starting on site in

September 2023. The facility would be operated by the Shirebrook Crematorium LLP,

which would be a partnership between Bolsover District Council and Shirebrook Town Council.

The Director of Finance (Section 151 Officer) had previously advised Executive that income and expenditure relating to cremations could adversely affect the Council’s partial exemption calculation and cost the Council money. Therefore, this would need fully investigating as part of the next stage of the project to ensure any VAT consequences relating to the Council’s Section 33 body status were factored into the feasibility cost plan before any final decision on borrowing was undertaken.

The Director of Finance had now sought this VAT advice from the Council’s tax advisors, PSTAX, which was set out in the report along with the measures needed to

structure the delivery of the scheme in order to comply with the advice given.

The land where the crematorium was to be built was currently owned by Shirebrook Town Council. In order to complete the lease referred to above, Shirebrook Town Council would need to transfer the land to the District Council for nil consideration. The transfer by the Town Council would represent its contribution to the scheme. The

transfer would be made subject to the Council entering into an agreement to lease the completed crematorium to the LLP.

Moved by Councillor Clive Moesby and seconded by Councillor John Ritchie

RESOVLED that 1) the Council takes a transfer of the Roseland Park land as shown edged red on the plan attached to the report from Shirebrook Town Council for nil consideration,

            2) the Council grant a lease of Roseland Park and crematorium for a             peppercorn rent on terms to be agreed by the Council’s Chief Executive,

            3) the Council enter into an agreement with the LLP setting out how the LLP             will operate the crematorium rent on terms to be agreed by the Council’s   Chief Executive, in consultation with the Director of Finance & Section 151         Officer.

            4) the Director of Finance & Section 151 Officer’s decision to opt to tax the             crematorium, in order to protect the Council’s partial exemption position, be approved.

Reason for Recommendations

To ensure the Council’s de minimis partial exemption position is protected, to mitigate any potential repayments of VAT to HMRC.

Whilst independent advice is being sought for the LLP’s VAT position, it should be noted that the LLP is separate from the Council and subject to separate VAT registration. The LLP would not be a local authority and would not receive the same VAT recovery position regarding exempt or non-business activities.

Alternative Options and Reasons for Rejection

The advice provided by PSTAX presents the only option available to the District Council to ensure it protects its partial exemption limit.

The recommendations from PSTAX align to the Council’s intended route of establishing a joint venture LLP to operate the crematorium, and confirm the steps needed to ensure the Council does not breach its de minimis partial exemption limit and trigger a repayment to HMRC of potentially £1.7m.