VAT advice

As a practice we can provide you with advice on VAT and can prepare returns for you.

  • business and non-business supplies
  • education, cultural, sports and other exemptions
  • mixed supplies such as subscriptions and membership
  • overseas supplies
  • VAT groups
  • preparing VAT returns where you are partially non-business and/or partially exempt

The operation of VAT law is a complex area for many third sector organisations. This is because they may be undertaking grant funded activity which is outside the scope of VAT, or they may be an “eligible body” for the purposes of the education, cultural, welfare and other exemptions. In these circumstances they may well be partially outside the scope of VAT, and/or partially exempt from VAT. As a result, if VAT registered, input VAT needs to be apportioned and reclaimed according to agreed methodologies.

Other issues we frequently advise on include:

  • Need for registration: many of our clients are not registered, but all need to keep a careful eye on whether they are likely to go over the registration threshold. As part of our accounts preparation, book-keeping or audit work we will assess whether this is likely to be an issue and advise you accordingly.
  • Buying overseas goods and services: often clients are unaware that the reverse charge needs to be applied to all purchases of services from overseas (such as digital services or software), and acquisition tax applies to goods bought from the EC. These contribute to your registration threshold, and if registered, can affect the amount of VAT you pay or reclaim.
  • Group VAT registration: You can often save VAT by including your parent company in a VAT group with its VAT registered subsidiary. This enable the parent to reclaim VAT even if, considered in isolation, the parent would not have been able to register.
  • Specific reliefs: for example for theatre productions and art galleries.
  • Subscriptions: what rate of VAT applies to them? This depends on the underlying services. The rate can follow the main supply, or they can be regarded as “mixed supplies”, or even as a donation and so outside the scope of VAT.
  • Grants: A grant should be just that – basically a donation or non-exchange transaction and so outside the scope of VAT. However many grants are now taking the form of contracts for the provision of services – which could be exempt or standard rated. If you have any doubt about this we strongly advise you to take advice before entering into an agreement.
  • Land: As a social housing developer you could be making zero rated supplies of freeholds or long leaseholds; as a sports club you could be making standard rated supplies of pitches or courts; as a charity you could be paying VAT on your rent when you should be able to get the landlord to exempt the supply. You may want to opt to tax your building so as to be able to reclaim VAT on repair costs – and then you may need to make annual adjustments because of the Capital Goods Scheme. The complications of VAT and land are endless – please get on touch!