Helping Unions Make Entertainments Make Money VATangles LLP
Objectives
No VAT on ticket sales
Objectives No VAT on ticket sales No VAT on cloaks income
Objectives No VAT on ticket sales No VAT on cloaks income No VAT on bar sales
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
Who are VATangles LLP?
VAT consultants specialising in: – Educational bodies
Who are VATangles LLP? VAT consultants specialising in: – Educational bodies – Students Unions
Who are VATangles LLP? VAT consultants specialising in: – Educational bodies – Students Unions – Charities and their subsidiaries
Who are VATangles LLP? VAT consultants specialising in: – Educational bodies – Students Unions – Charities and their subsidiaries – Healthcare institutions
Who am I?
Noel Tyler
Who am I? Noel Tyler First VAT Consultant to work with Students Unions – since 1991
Who am I? Noel Tyler First VAT Consultant to work with Students Unions – since 1991 Worked with Loughborough since 1993
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
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
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
The Beginning
1990 – New VAT Directive
The Beginning 1990 – New VAT Directive – Financial sector
The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs
The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs – Cultural services
The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs – Cultural services – Exemptions for charities
The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs – Cultural services – Exemptions for charities I wrote lead article on
The Beginning 1990 – New VAT Directive – Financial sector – Sports clubs – Cultural services – Exemptions for charities I wrote lead article on – Financial sector
VAT and Entertainments - Historically
Everything subject to VAT;
VAT and Entertainments - Historically Everything subject to VAT; However !!!!!
VAT and Entertainments - Historically Everything subject to VAT; However !!!!! 1996 – Cheltenham & Gloucester College of Higher Education Students Union
VAT and Entertainments - Historically Everything subject to VAT; However !!!!! 1996 – Cheltenham & Gloucester College of Higher Education Students Union Re: Graduation Balls and Freshers Balls
More Recently
2003 – Hull Truck Theatre
More Recently 2003 – Hull Truck Theatre HMC & E claimed VAT exemption re: Cultural Services
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
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?
VAT and Cultural Services
Article 132(1)(n) of the Principal VAT Directive
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
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.
VAT and Cultural Services Eligible Body
VAT and Cultural Services Eligible Body – is precluded from distributing, and does not distribute, any profit it makes;
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
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.
VAT and Cultural Services VAT saved on ticket salesYES
VAT and Cultural Services VAT saved on ticket salesYES VAT saved on cloaks incomeNO
VAT and Cultural Services VAT saved on ticket salesYES VAT saved on cloaks incomeNO VAT saved on bar salesNO
VAT and Cultural Services Still being fought for a number of Unions
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
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!!!!!
VAT and Fundraising Activities
Students Unions are charitable bodies – always were
VAT and Fundraising Activities Students Unions are charitable bodies – always were Therefore should be entitled to charity VAT exemptions
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
Fundraising Activities VAT Exemptions Include Bar Sales!!!
VAT and Fundraising Activities VAT saved on ticket salesYES
VAT and Fundraising Activities VAT saved on ticket salesYES VAT saved on cloaks incomeYES
VAT and Fundraising Activities VAT saved on ticket salesYES VAT saved on cloaks incomeYES VAT saved on bar salesYES
VAT and Fundraising Activities EU Law – Article 131(1)(o) – Principle VAT Directive
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.
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.
VAT and Fundraising Activities Item 1 of Group 12 of Schedule 9 to the Value Added Tax Act 1994 exempts from VAT
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 –
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
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
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.
VAT and Fundraising Activities Note 4 to Group 12
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
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
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
Primary Purpose
– Not a requirement of EU law - merely an important purpose – Newsvendors Benevolent Institution
Primary Purpose – Not a requirement of EU law - merely an important purpose – Newsvendors Benevolent Institution – Possible arguments re: Graduation Balls and Freshers Balls
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
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
Primary Purpose HMRC can only substitute statement of primary purpose where:
Primary Purpose HMRC can only substitute statement of primary purpose where: – They can show purposer is not telling the truth
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;
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
Promoted as Primary Purpose
Again not an EU law requirement
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
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
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.
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
Fifteen Events of a Type
Types can include, for example, live acts, DJs, balls, parties, comedy, karaoke, quiz, magicians, conferences
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
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
In a Location
University Campus to be safe
In a Location University Campus to be safe; however May be individual buildings or even rooms
In a Location University Campus to be safe; however May be individual buildings or even rooms Compass Catering
Where are HMRC on this?
They dont like it, but cant decide why
Where are HMRC on this? They dont like it, but cant decide why About as static as Bambi on Ice!
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
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??
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?
How do we go forward?
Unions position is overwhelmingly strong and correct – Mr John Tallon QC
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
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
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
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!
Any questions?
Thank you for listening