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Hi I run a kids rugby club teaching sports activity to

Resolved Question:

Hi

I run a kids rugby club teaching sports activity to children 2 - 7yrs and sold commecially as membership subscription services. Children either buy:

Option 1: £12/lesson and pay for a term in advance

Option: £30 membership fee and £9.60 /lesson.

We are small but growing and the company is Ltd with shares. It is not a non-profit but provides many services to a non-profit organisation. Are my services exempt from VAT?

I have read this but it is is very hard to understand.
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_CL_000115#P415_26155

Advice appreciated.
Submitted: 1 year ago.
Category: UK Tax
Expert:  TaxVince replied 1 year ago.

MamaTax :

Hi Its MamaTax Here!

MamaTax :

Thanks for the question.

MamaTax :

The VAT liability on Educational services depends on three main criteria, which are as follows:
• Education of a type normally provided by schools, colleges, universities.
• The supplier has to be an “eligible body”, which is normally a publically funded educational establishment or non-profit making organisation.
• Exemption for certain types of training if funded by certain government sponsored training schemes.


So to qualify for exemption, your services have to fulfill one or more of these criteria, depending on the part of the legislation concerned.

MamaTax :

Given your situation, you are LTD providing these services, you wont have the VAT exemption rather everything is standard rated.

MamaTax :

Let me know if you are answered. If not drop me a message.

MamaTax :

Regards

Customer:

yes however there are a number of criteria we do fit. if you have a waiting list for members and they are charged to be on the waiting list which is later redeemed if they don't get in or redeemed against their subscription if they do get in then this does make services exempt for sports clubs. is this not correct?

MamaTax :

No this doesnt change anything. You get VAT exemption from educational services including sport if provided by sole traders/individuals and not by a profit making LTD. However if the question is when should you be charging VAT on deposits or waiting list fees, then one needs to understand the transactions first - the general principle is you charge VAT on the deposits/advances/prepayments/ etc as soon as the chances of a member completing the process are high and such grey areas are advised to get your local VAT office to "approve" your treatment to avoid future issues with them.

TaxVince, Accountant
Category: UK Tax
Satisfied Customers: 961
Experience: Chartered Accountant >20 years + Qualified IFA
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