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Helping Unions Make Entertainments Make Money VATangles LLP
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Objectives
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No VAT on ticket sales
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Objectives No VAT on ticket sales No VAT on cloaks income
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Objectives No VAT on ticket sales No VAT on cloaks income No VAT on bar sales
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Objectives No VAT on ticket sales No VAT on cloaks income No VAT on bar sales To minimise the loss of irrecoverable VAT on purchases re: the above
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Who are VATangles LLP?
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VAT consultants specialising in: – Educational bodies
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Who are VATangles LLP? VAT consultants specialising in: – Educational bodies – Students Unions
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Who are VATangles LLP? VAT consultants specialising in: – Educational bodies – Students Unions – Charities and their subsidiaries
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Who are VATangles LLP? VAT consultants specialising in: – Educational bodies – Students Unions – Charities and their subsidiaries – Healthcare institutions
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Who am I?
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Noel Tyler
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Who am I? Noel Tyler First VAT Consultant to work with Students Unions – since 1991
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Who am I? Noel Tyler First VAT Consultant to work with Students Unions – since 1991 Worked with Loughborough since 1993
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Who am I? Noel Tyler First VAT Consultant to work with Students Unions – since 1991 Worked with Loughborough since 1993 Currently act for approximately 12 Students Unions
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Who am I? Noel Tyler First VAT Consultant to work with Students Unions – since 1991 Worked with Loughborough since 1993 Currently act for approximately 12 Students Unions Spend approx. 75% of my working life in or with Students Unions
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Who am I? Noel Tyler First VAT Consultant to work with Students Unions – since 1991 Worked with Loughborough since 1993 Currently act for approximately 12 Students Unions Spend approx. 75% of my working life in or with Students Unions Saved > £5 million for Students Unions
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The Beginning
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1990 – New VAT Directive
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The Beginning 1990 – New VAT Directive – Financial sector
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The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs
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The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs – Cultural services
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The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs – Cultural services – Exemptions for charities
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The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs – Cultural services – Exemptions for charities I wrote lead article on
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The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs – Cultural services – Exemptions for charities I wrote lead article on – Financial sector
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VAT and Entertainments - Historically
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Everything subject to VAT;
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VAT and Entertainments - Historically Everything subject to VAT; However !!!!!
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VAT and Entertainments - Historically Everything subject to VAT; However !!!!! 1996 – Cheltenham & Gloucester College of Higher Education Students Union
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VAT and Entertainments - Historically Everything subject to VAT; However !!!!! 1996 – Cheltenham & Gloucester College of Higher Education Students Union Re: Graduation Balls and Freshers Balls
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More Recently
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2003 – Hull Truck Theatre
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More Recently 2003 – Hull Truck Theatre HMC & E claimed VAT exemption re: Cultural Services
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More Recently 2003 – Hull Truck Theatre HMC & E claimed VAT exemption re: Cultural Services Would have cost theatre >£2million in VAT on construction and fitting out
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More Recently 2003 – Hull Truck Theatre HMC & E claimed VAT exemption re: Cultural Services Would have cost theatre >£2million in VAT on construction and fitting out Why not for Students Unions?
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VAT and Cultural Services
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Article 132(1)(n) of the Principal VAT Directive
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VAT and Cultural Services Article 132(1)(n) of the Principal VAT Directive Item 2(b) of Group 13 of Schedule 9 to the Value Added Tax Act 1994
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VAT and Cultural Services Article 132(1)(n) of the Principal VAT Directive Item 2(b) of Group 13 of Schedule 9 to the Value Added Tax Act 1994 – Exempts from VAT The supply by an eligible body of a right of admission to a theatrical, musical or choreographic event of a cultural nature.
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VAT and Cultural Services Eligible Body
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VAT and Cultural Services Eligible Body – is precluded from distributing, and does not distribute, any profit it makes;
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VAT and Cultural Services Eligible Body – is precluded from distributing, and does not distribute, any profit it makes; – applies any profits made to the continuance or improvement of the facilities made available by means of the supply
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VAT and Cultural Services Eligible Body – is precluded from distributing, and does not distribute, any profit it makes; – applies any profits made to the continuance or improvement of the facilities made available by means of the supply; and – is managed and administered on an essentially voluntary basis by persons who have no direct or indirect interest in its activities.
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VAT and Cultural Services VAT saved on ticket salesYES
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VAT and Cultural Services VAT saved on ticket salesYES VAT saved on cloaks incomeNO
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VAT and Cultural Services VAT saved on ticket salesYES VAT saved on cloaks incomeNO VAT saved on bar salesNO
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VAT and Cultural Services Still being fought for a number of Unions
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VAT and Cultural Services Still being fought for a number of Unions Unarguable going forward now due to change of governance under Charities Act 2006
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VAT and Cultural Services Still being fought for a number of Unions Unarguable going forward now due to change of governance under Charities Act 2006 However!!!!!
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VAT and Fundraising Activities
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Students Unions are charitable bodies – always were
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VAT and Fundraising Activities Students Unions are charitable bodies – always were Therefore should be entitled to charity VAT exemptions
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VAT and Fundraising Activities Students Unions are charitable bodies – always were Therefore should be entitled to charity VAT exemptions Also available to wholly owned subsidiaries of charitable bodies
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Fundraising Activities VAT Exemptions Include Bar Sales!!!
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VAT and Fundraising Activities VAT saved on ticket salesYES
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VAT and Fundraising Activities VAT saved on ticket salesYES VAT saved on cloaks incomeYES
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VAT and Fundraising Activities VAT saved on ticket salesYES VAT saved on cloaks incomeYES VAT saved on bar salesYES
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VAT and Fundraising Activities EU Law – Article 131(1)(o) – Principle VAT Directive
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VAT and Fundraising Activities EU Law – Article 131(1)(o) – Principle VAT Directive – Exempts from VAT The supply of goods or services by [charitable bodies] in connection with fund raising events organised exclusively for their own benefit.
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VAT and Fundraising Activities Article 13A(1) continues – Member States may introduce any necessary restrictions in particular as regards the number of events or the amount of receipts which give rise to the exemption.
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VAT and Fundraising Activities Item 1 of Group 12 of Schedule 9 to the Value Added Tax Act 1994 exempts from VAT
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VAT and Fundraising Activities Item 1 of Group 12 of Schedule 9 to the Value Added Tax Act 1994 exempts from VAT The supply of goods and services by a charity in connection with an event –
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VAT and Fundraising Activities Item 1 of Group 12 of Schedule 9 to the Value Added Tax Act 1994 exempts from VAT The supply of goods and services by a charity in connection with an event – – (a) that is organised by that charity, or jointly by more than one charity; and
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VAT and Fundraising Activities Item 1 of Group 12 of Schedule 9 to the Value Added Tax Act 1994 exempts from VAT The supply of goods and services by a charity in connection with an event – – (a) that is organised by that charity, or jointly by more than one charity; and – (b) whose primary purpose is the raising of money; and
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VAT and Fundraising Activities Item 1 of Group 12 of Schedule 9 to the Value Added Tax Act 1994 exempts from VAT The supply of goods and services by a charity in connection with an event – – (a) that is organised by that charity, or jointly by more than one charity; and – (b) whose primary purpose is the raising of money; and – (c) that is promoted as being primarily for the raising of money.
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VAT and Fundraising Activities Note 4 to Group 12
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VAT and Fundraising Activities Note 4 to Group 12 Exemption applies to up to and including fifteen events of a type in a location in a financial year
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VAT and Fundraising Activities Note 4 to Group 12 Exemption applies to up to and including fifteen events of a type in a location in a financial year Where more than fifteen event are help of a type in a location all become subject to VAT
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VAT and Fundraising Activities Note 4 to Group 12 Exemption applies to up to and including fifteen events of a type in a location in a financial year Where more than fifteen event are help of a type in a location all become subject to VAT Fifteen events of a type in a location does not include events of a type where the total funds raised in a week come to <£1,000
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Primary Purpose
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– Not a requirement of EU law - merely an important purpose – Newsvendors Benevolent Institution
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Primary Purpose – Not a requirement of EU law - merely an important purpose – Newsvendors Benevolent Institution – Possible arguments re: Graduation Balls and Freshers Balls
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Primary Purpose – Not a requirement of EU law - merely an important purpose – Newsvendors Benevolent Institution – Possible arguments re: Graduation Balls and Freshers Balls – Otherwise must be with the purposer
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Primary Purpose – Not a requirement of EU law - merely an important purpose – Newsvendors Benevolent Institution – Possible arguments re: Graduation Balls and Freshers Balls – Otherwise must be with the purposer – What other primary purpose can there be
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Primary Purpose HMRC can only substitute statement of primary purpose where:
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Primary Purpose HMRC can only substitute statement of primary purpose where: – They can show purposer is not telling the truth
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Primary Purpose HMRC can only substitute statement of primary purpose where: – They can show purposer is not telling the truth; or – They can show purposer is confused;
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Primary Purpose HMRC can only substitute statement of primary purpose where: – They can show purposer is not telling the truth; or – They can show purposer is confused; or – Purposer is truthful but no other reasonable businessman put in the same conditions would have made the same decision
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Promoted as Primary Purpose
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Again not an EU law requirement
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Promoted as Primary Purpose Again not an EU law requirement HMRC guidelines suggested strapline etc. – This event is raising funds for ***** Students Union, or This is a **** Students Union fundraiser
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Promoted as Primary Purpose Again not an EU law requirement HMRC guidelines suggested strapline etc. – This event is raising funds for ***** Students Union, or This is a **** Students Union fundraiser To appear on posters, flyers and tickets
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Promoted as Primary Purpose Again not an EU law requirement HMRC guidelines suggested strapline etc. – This event is raising funds for ***** Students Union, or This is a **** Students Union fundraiser To appear on posters, flyers and tickets Also possibly minuted in Trustees minutes, pop-up banners etc.
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Promoted as Primary Purpose Again not an EU law requirement HMRC guidelines suggested strapline etc. – This event is raising funds for ***** Students Union, or This is a **** Students Union fundraiser To appear on posters, flyers and tickets Also possibly minuted in Trustees minutes, pop- up banners etc. Suggested minuted meetings but these are not requirements
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Fifteen Events of a Type
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Types can include, for example, live acts, DJs, balls, parties, comedy, karaoke, quiz, magicians, conferences
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Fifteen Events of a Type Types can include, for example, live acts, DJs, balls, parties, comedy, karaoke, quiz, magicians, conferences One Union – Over 50 separate qualifying events per annum
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Fifteen Events of a Type Types can include, for example, live acts, DJs, balls, parties, comedy, karaoke, quiz, magicians, conferences One Union – Over 50 separate qualifying events per annum Events must have their Oxford English Dictionary definition – Blaydon Rugby Football Club
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In a Location
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University Campus to be safe
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In a Location University Campus to be safe; however May be individual buildings or even rooms
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In a Location University Campus to be safe; however May be individual buildings or even rooms Compass Catering
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Where are HMRC on this?
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They dont like it, but cant decide why
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Where are HMRC on this? They dont like it, but cant decide why About as static as Bambi on Ice!
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Where are HMRC on this? They dont like it, but cant decide why About as static as Bambi on Ice! Latest – constitutions require Unions to provide social, cultural, sporting and recreational activities
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Where are HMRC on this? They dont like it, but cant decide why About as static as Bambi on Ice! Latest – constitutions require Unions to provide social, cultural, sporting and recreational activities Also – events of a regular basis??
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Where are HMRC on this? They dont like it, but cant decide why About as static as Bambi on Ice! Latest – constitutions require Unions to provide social, cultural, sporting and recreational activities Also – events of a regular basis?? Requirement to minute intention?
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How do we go forward?
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Unions position is overwhelmingly strong and correct – Mr John Tallon QC
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How do we go forward? Unions position is overwhelmingly strong and correct – Mr John Tallon QC HMRC will throw in the towel if they lose the primary purpose test
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How do we go forward? Unions position is overwhelmingly strong and correct – Mr John Tallon QC HMRC will throw in the towel if they lose the primary purpose test Potential savings here are substantial
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How do we go forward? Unions position is overwhelmingly strong and correct – Mr John Tallon QC HMRC will throw in the towel if they lose the primary purpose test Potential savings here are substantial Truly nothing to lose
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How do we go forward? Unions position is overwhelmingly strong and correct – Mr John Tallon QC HMRC will throw in the towel if they lose the primary purpose test Potential savings here are substantial Truly nothing to lose Join me in the battle!
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Any questions?
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Thank you for listening
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