helping unions make entertainments make money vatangles llp
TRANSCRIPT
Helping Unions Make Entertainments Make Money
VATangles LLP
Objectives
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?
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?
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
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
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
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
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 sales YES
VAT and Cultural Services
• VAT saved on ticket sales YES• VAT saved on cloaks income NO
VAT and Cultural Services
• VAT saved on ticket sales YES• VAT saved on cloaks income NO• VAT saved on bar sales NO
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
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 sales YES
VAT and Fundraising Activities
• VAT saved on ticket sales YES• VAT saved on cloaks income YES
VAT and Fundraising Activities
• VAT saved on ticket sales YES• VAT saved on cloaks income YES• VAT saved on bar sales YES
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
Primary Purpose
• Primary Purpose– Not a requirement of EU law - merely an
important purpose – Newsvendors Benevolent Institution
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
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”
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
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
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
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
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?
Where are HMRC on this?
• They don’t like it, but can’t decide why
Where are HMRC on this?
• They don’t like it, but can’t decide why• About as static as Bambi on Ice!
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
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??
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?
How do we go forward?
How do we go forward?
• Union’s position is overwhelmingly strong and correct – Mr John Tallon QC
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
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
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
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!
Any questions?
Thank you for listening