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Post Info TOPIC: Village Hall registered as a charity looking to VAT register - good idea?


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Village Hall registered as a charity looking to VAT register - good idea?


Local village hall is looking to register for VAT as they want to build a multi-use-games-area (build in the loosest sense, looks to be setting up pitches on the recreation area)

Cost will be about £70k plus VAT of around £14k which they would like to reclaim. But if they register to reclaim this I think they need to charge VAT on the hall bookings? And all bookings will need to be via a subsidiary as this is business activity - have I read the HMRC notice correctly? If anyone has any alternative ideas I'd be very grateful as this is only my interpretation but I do wonder if I ought to pass this on to someone with a bit more experience of charity work. 

 

Thanks

Liz



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Master Book-keeper

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So hows about an intro before we start. We always ask newbies!

Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, are you a bookkeeper or accountant, what qualifications, how long in role, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? That sort of thing. Helps get to know you but also how best to pitch answers.

You need to give some more information as to how they generate income - ie exactly where it is from, surely not just hall bookings? How is the build being paid for?

Under what jurisdiction is the charity registered - England/Scotland?

What gives you the idea a subsidiary is needed?

Dont relay on HMRC VAT notices - they are just guidance, only HMRCs interpretation of the law and therefore often wrong.

 

 

edited to add 'jurisdiction' (mistyped!)



-- Edited by Cheshire on Monday 16th of April 2018 03:19:52 PM

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Joanne  McCormick

Fallows  Hall  Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Master Book-keeper

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Ah, I can see that you have popped this one on Accountingweb as well - so lets just leave it over there rather than duplicating effort.



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Joanne  McCormick

Fallows  Hall  Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Newbie

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Hi Joanne

Thanks for the reply

I'm AAT qualified (NVQ2, 3 and 4), been doing bookeeping for 10years plus a few self assessments for subbies and soletraders.

I have asked the question re funding etc. Charity is registered in England. I'll post up when the hall manager comes back to me.

HMRC said a subsidiary as rental is business income. I thought it was part of being a village hall as a sort of community space? I could be wrong...does happen occasionally!

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Master Book-keeper

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Hi

For those who havent yet seen it - here is the Aweb post
www.accountingweb.co.uk/any-answers/village-hall-charity-vat-registration-a-good-idea

....although the sharp eyed will notice there is some extra bits of info in each, that the other hasnt got. No matter, as I said, no point duplicating effort on both forums, hard enough to find the time for one sometimes, albeit welcome to this one.

I would take what HMRC advisors say over the phone with an even bigger pinch of salt than what is in their manuals.

Given in your other post specifically you mention a lack of knowledge on this subject and having no problem handing it off, I can recommend a VAT expert who could look at this for you - Les Howard. He is a contributor on here AND on Aweb - I suspect he will answer on Aweb before on here. I can get you his contact details if required.


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Joanne  McCormick

Fallows  Hall  Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Newbie

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Funds came from S106 - new housing development funds totalling £45k with the remaining to come from fundraising.
Its going to be an allweather pitch - hockey, walking football, cricket that sort of thing. They will charge a nominal fee for renting and their only income is renting the hall.

Is it bad practise to post on both sites? My apologies if it, I was hoping for a couple of opinions on the issue.

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Newbie

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Please do send his info over and I can get in touch, much appreciated :)



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Master Book-keeper

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We are much friendlier and with a name like that you will fit right in with our regulars!

Its just that most of the responders on here, are also on Aweb, although some have different names so no point in doubling up.

You havent set the PM facility so I cannot send you the info - will see if I can email you via the dark side (Aweb I mean)

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Joanne  McCormick

Fallows  Hall  Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Senior Member

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The question opens up some potentially complex VAT issues:
1. is the new 'recreation area' an area dedicated for sports activities, or something else?
2. will users be able to use the existing AND new areas?
3. what is the current annual income of the hall?
4. are most/all users not registered for VAT?
Will be worth a telecon to explore options; it is possible, given the value of the project, that VAT registration is NOT the best option.
Happy for you to PM me (or PM via AccWeb).

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Veteran Member

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Cheshire wrote:

We are much friendlier and with a name like that you will fit right in with our regulars!


I'm rather partial to a glass of Pimms and it makes me think of nice weather...summer warmth biggrin



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Janet

They keep making the system idiot proof but then make bigger and better idiots!

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