Presentation Transcript

1. Helping Unions Make Entertainments Make Money

   VATangles LLP

2. Objectives

3. Objectives No VAT on ticket sales
4. Objectives No VAT on ticket sales No VAT on cloaks income
5. Objectives No VAT on ticket sales No VAT on cloaks income No VAT on bar sales
6. 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

7. Who are VATangles LLP?

8. Who are VATangles LLP? VAT consultants specialising in: Educational bodies
9. Who are VATangles LLP? VAT consultants specialising in: Educational bodies Students’ Unions
10. Who are VATangles LLP? VAT consultants specialising in: Educational bodies Students’ Unions Charities and their subsidiaries
11. Who are VATangles LLP? VAT consultants specialising in: Educational bodies Students’ Unions Charities and their subsidiaries Healthcare institutions

12. Who am I?

13. Who am I? Noel Tyler
14. Who am I? Noel Tyler First VAT Consultant to work with Students’ Unions – since 1991
15. Who am I? Noel Tyler First VAT Consultant to work with Students’ Unions – since 1991 Worked with Loughborough since 1993
16. 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
17. 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
18. 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

19. The Beginning

20. The Beginning 1990 – New VAT Directive
21. The Beginning 1990 – New VAT Directive Financial sector
22. The Beginning 1990 – New VAT Directive Financial sector Sports clubs
23. The Beginning 1990 – New VAT Directive Financial sector Sports clubs Cultural services
24. The Beginning 1990 – New VAT Directive Financial sector Sports clubs Cultural services Exemptions for charities
25. The Beginning 1990 – New VAT Directive Financial sector Sports clubs Cultural services Exemptions for charities I wrote lead article on
26. The Beginning 1990 – New VAT Directive Financial sector Sports clubs Cultural services Exemptions for charities I wrote lead article on Financial sector

27. VAT and Entertainments - Historically

28. VAT and Entertainments - Historically Everything subject to VAT;
29. VAT and Entertainments - Historically Everything subject to VAT; However !!!!!
30. VAT and Entertainments - Historically Everything subject to VAT; However !!!!! 1996 – Cheltenham & Gloucester College of Higher Education Students’ Union
31. VAT and Entertainments - Historically Everything subject to VAT; However !!!!! 1996 – Cheltenham & Gloucester College of Higher Education Students’ Union Re: Graduation Balls and Freshers Balls

32. More Recently

33. More Recently 2003 – Hull Truck Theatre
34. More Recently 2003 – Hull Truck Theatre HMC & E claimed VAT exemption re: Cultural Services
35. 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
36. 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?

37. VAT and Cultural Services

38. VAT and Cultural Services Article 132(1)(n) of the Principal VAT Directive
39. 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
40. 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”.
41. VAT and Cultural Services Eligible Body
42. VAT and Cultural Services Eligible Body is precluded from distributing, and does not distribute, any profit it makes;
43. 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
44. 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.
45. VAT and Cultural Services VAT saved on ticket sales YES
46. VAT and Cultural Services VAT saved on ticket sales YES VAT saved on cloaks income NO
47. VAT and Cultural Services VAT saved on ticket sales YES VAT saved on cloaks income NO VAT saved on bar sales NO
48. VAT and Cultural Services Still being fought for a number of Unions
49. 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
50. 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!!!!!

51. VAT and Fundraising Activities

52. VAT and Fundraising Activities Students’ Unions are charitable bodies – always were
53. VAT and Fundraising Activities Students’ Unions are charitable bodies – always were Therefore should be entitled to charity VAT exemptions
54. 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

55. Fundraising Activities VAT Exemptions Include Bar Sales!!!

56. VAT and Fundraising Activities VAT saved on ticket sales YES
57. VAT and Fundraising Activities VAT saved on ticket sales YES VAT saved on cloaks income YES
58. VAT and Fundraising Activities VAT saved on ticket sales YES VAT saved on cloaks income YES VAT saved on bar sales YES
59. VAT and Fundraising Activities EU Law – Article 131(1)(o) – Principle VAT Directive
60. 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”.
61. 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”.
62. VAT and Fundraising Activities Item 1 of Group 12 of Schedule 9 to the Value Added Tax Act 1994 exempts from VAT
63. 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 –
64. 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
65. 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
66. 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”.
67. VAT and Fundraising Activities Note 4 to Group 12
68. 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
69. 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
70. 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

71. Primary Purpose

72. Primary Purpose Primary Purpose Not a requirement of EU law - merely an important purpose – Newsvendors Benevolent Institution
73. Primary Purpose Primary Purpose Not a requirement of EU law - merely an important purpose – Newsvendors Benevolent Institution Possible arguments re: Graduation Balls and Freshers Balls
74. Primary Purpose 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”
75. Primary Purpose 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
76. Primary Purpose HMRC can only substitute statement of primary purpose where:
77. Primary Purpose HMRC can only substitute statement of primary purpose where: They can show purposer is not telling the truth
78. 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;
79. 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

80. Promoted as Primary Purpose

81. Promoted as Primary Purpose Again not an EU law requirement
82. 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
83. 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
84. 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.
85. 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

86. Fifteen Events of a Type

87. Fifteen Events of a Type Types can include, for example, live acts, DJs, balls, parties, comedy, karaoke, quiz, magicians, conferences
88. 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
89. 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

90. In a Location

91. In a Location University Campus to be safe
92. In a Location University Campus to be safe; however May be individual buildings or even rooms
93. In a Location University Campus to be safe; however May be individual buildings or even rooms Compass Catering

94. Where are HMRC on this?

95. Where are HMRC on this? They don’t like it, but can’t decide why
96. Where are HMRC on this? They don’t like it, but can’t decide why About as static as Bambi on Ice!
97. Where are HMRC on this? They don’t like it, but can’t decide why About as static as Bambi on Ice! Latest – constitutions require Unions to provide social, cultural, sporting and recreational activities
98. Where are HMRC on this? They don’t like it, but can’t 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??
99. Where are HMRC on this? They don’t like it, but can’t 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?

100. How do we go forward?

101. How do we go forward? Union’s position is overwhelmingly strong and correct – Mr John Tallon QC
102. How do we go forward? Union’s position is overwhelmingly strong and correct – Mr John Tallon QC HMRC will throw in the towel if they lose the ‘primary purpose’ test
103. How do we go forward? Union’s 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
104. How do we go forward? Union’s 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
105. How do we go forward? Union’s 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!

106. Any questions?

107. Thank you for listening