Tax relief grants for housing associations: HA 1988 s. 54
HA 1988 s. 54: grants tax relief to housing associations relevant, non-profit, not CTA 2010 Ch.7 approved. Covers income tax and corporation tax.
If a housing association makes a claim to the Secretary of State in respect of a period and satisfies him that throughout the period it was a housing association to which this section applies and its functions either— consisted exclusively of the function of providing or maintaining housing accommodation for letting or hostels and activities incidental to that function, or included that function and activities incidental to that function, the Secretary of State may make grants to the association for affording relief from tax chargeable on the association. This section applies to a housing association at any time if, at that time— it is a relevant housing association ; it does not trade for profit; and it is not approved for the purposes of Chapter 7 of Part 13 of the Corporation Tax Act 2010 (tax treatment of co-operative housing associations). References in this section to tax chargeable on an association are to income tax (other than income tax which the association is entitled to deduct on making any payment) and corporation tax. A grant under this section may be made— in a case falling within subsection (1)(a) above, for affording relief from any tax chargeable on the association for the period in respect of which the claim is made; and in a case falling within subsection (1)(b) above, for affording relief from such part of any tax so chargeable as the Secretary of State considers appropriate having regard to the other functions of the association; and in any case shall be of such amount, shall be made at such times and shall be subject to such conditions as the Secretary of State thinks fit. The conditions may include conditions for securing the repayment in whole or in part of a grant made to an association— in the event of tax in respect of which it was made being found not to be chargeable; or in such other events (including the association beginning to trade for profit) as the Secretary of State may determine. A claim under this section shall be made in such manner and shall be supported by such evidence as the Secretary of State may direct. The Commissioners of Inland Revenue and their officers may disclose to the Secretary of State such particulars as he may reasonably require for determining whether a grant should be made on a claim or whether a grant should be repaid or the amount of such grant or repayment. In this section “ letting ” includes— in England and Wales, the grant of a shared ownership lease or a licence to occupy; in Scotland, disposal under a shared ownership agreement or the grant of a right or permission to occupy.
Text in force at .
Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.
What it actually says
This section allows the Secretary of State to make grants to housing associations to cover some of their tax bills. To qualify, the association must be a "relevant housing association" (defined elsewhere), must not trade for profit, and must not be approved under Chapter 7 of Part 13 of the Corporation Tax Act 2010 (which covers co-operative housing associations). The association's functions must be exclusively providing or maintaining housing for letting or hostels and related activities, or at least include that function.
The grant can cover income tax (except tax the association deducts from payments) and corporation tax. If the association's only functions are those housing activities, the grant can relieve all tax for the period. If it has other functions, the Secretary of State decides what part of the tax to relieve. The amount, timing, and conditions are at the Secretary of State's discretion. Conditions can require repayment if the tax turns out not to be chargeable or if the association starts trading for profit.
Claims must be made in the manner and with evidence the Secretary of State directs. HMRC can disclose information to the Secretary of State to decide on grants or repayments. "Letting" includes shared ownership leases or licences to occupy in England and Wales.
When it applies
- A housing association that solely manages council housing for rent applies for a grant to cover its corporation tax liability for the year.
- A housing association that also runs a small café in its community centre applies for a partial grant.
- The Secretary of State requires a grant to be repaid after discovering the association made a profit from trading.
- A housing association's claim is rejected because it is approved under CTA 2010 Ch.7 for co-operative housing.
- HMRC provides the Secretary of State with details of the association's income tax to calculate the grant amount.
What this section does not say
- This section does not provide grants for building new homes or refurbishment.
- It does not apply to private landlords or for-profit housing companies.
- It does not exempt the association from tax automatically; the grant is discretionary.
- It does not cover VAT, stamp duty, or other taxes.
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This page reproduces the text of HA 1988 s. 54 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.