How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4087
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

VAT question I am looking at a new venture, currently undecided

Customer Question

VAT question
I am looking at a new venture, currently undecided as to a ltd company or a charity setup.
I will be providing residential training seminars on addiction with an approx. turnover of £125k
My main cost of sales will be the residential accommodation including food of approx. £75k including VAT.
Will I have to pay VAT on 100% of the £125k turnover, or would a portion of those sales be exempt or zero rated. Would it make a difference if I was a charity or a Ltd company.
Thank you for your assistance
Sally
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Sally, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
As you are probably aware the VAT Threshold is 82K in any one year. Residential training seminars are a standard rated supply so your invoices should have VAT at 20% added.
VAT and charities is covered in BAT Notice 701/1 which you can find here:
https://www.gov.uk/government/publications/vat-notice-7011-charities/vat-notice-7011-charities
Looking at paragraph 1.3 of the Notice it would appear that even if your proposed organization were structured as a charity neither zero rating no exempt status would apply.
The supply of educational services is covered in VAT Notice 701/30 which you can find here:
https://www.gov.uk/government/publications/vat-notice-70130-education-and-vocational-training/vat-notice-70130-education-and-vocational-training
In very general terms to avoid VAT your organization would have to be an eligible body and your proposed one would not appear to comply.
Remember, that if you get involved in exempt supplies as opposed o standard, reduced or zero rated ones then input tax cannot be reclaimed. From the tenor of your question your business model would appear to attract substantial inputs.
I am so sorry to have to rain on your parade.