Business Structure for After School club business

Trying to work out the best stucture for my LLP business

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Hi everyone,

Thank you in advance

I run a medium sized dance school (LLP) with 2 partners. We are VAT registered with my partners classes partially exempt. The rest of out classes are 20% VAT.

Many of my competitios for whatever reason seem to not be reistered, dont pay VAT or are Charities.

 

My questions are.

1. I assist in the classes with the teacher. Is any of the work I do (including the admin to get the customers in) partially exempt. I do help in the classes with the children and the classes would not be able to run without me assisting. After speaking to an ex-HMRC employee, I am assisting the class not the teacher.

2.Should I make my long time teachers who teach the most and therefore bring in the most money, partners? Pros & Cons?

3.We do offer bursaries, discounts and work with the council offering free and discounted classes. Charitable possibly but we are not a charity? As many other schools seem to be so, should we become a charity or a CIC?

I appreciate there are a few questions and appreciate any answers.

Regards,

Rob

Replies (10)

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By David Ex
17th Nov 2023 23:24

It appears you need to engage an accountant. Professional tax advice isn’t free just like dancing lessons aren’t free.

https://find.icaew.com/

Other professional bodies are available.

Thanks (4)
Replying to David Ex:
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By Roblondon
17th Nov 2023 23:35

Apologies again David. I assumed, possibly, wrongly that 'AnyAnswers' would be the place to ask 'AnyQuestions'.

You are correct that dancing lessons aren't free......but dance advice is, if people ask me.
Have a great evening
Rob

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RLI
By lionofludesch
17th Nov 2023 23:25

The advice you're asking for is far too detailed for an internet forum.

Ask your accountant. If you don't have one, get one because you clearly need one.

Thanks (1)
Replying to lionofludesch:
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By Roblondon
17th Nov 2023 23:36

Hi Lion,

I do have one, but wanted to see if there was a different approach before I ask them. I find that with accounting advice, the answer depends on how I ask the question.

Regards,
Robert

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Replying to Roblondon:
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By Leywood
17th Nov 2023 23:42

[quote=Roblondon] ‘I find that with accounting advice, the answer depends on how I ask the question.’

In that case you need a new Accountant.

BTW, this is a forum for Accountants to discuss technical queries, not for business folk to get free advice.

Thanks (1)
Replying to Leywood:
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By Roblondon
20th Nov 2023 10:49

BTW, this is a forum for Accountants to discuss technical queries, not for business folk to get free advice.

[/quote]
Apologies, i did not know that. I will leave the chat

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Replying to Roblondon:
RLI
By lionofludesch
17th Nov 2023 23:56

Roblondon wrote:

Hi Lion,

I do have one, but wanted to see if there was a different approach before I ask them. I find that with accounting advice, the answer depends on how I ask the question.

Regards,
Robert

You'll never be able to give us all the pertinent information to advise you well.

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Replying to lionofludesch:
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By Roblondon
18th Nov 2023 06:28

thank you anyway

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VAT
By Jason Croke
18th Nov 2023 14:24

Seems popular for dance classes and anything else like this (karate, music lessons, sports for little 'uns) to put lots and lots of effort into structures that avoid VAT registration, and like anything in life that you are trying to avoid, it's not easy or quick or cheap.

You've already got the LLP structure which doesn't necessarily give you the exemption you think it might, depends on whether the Partners are salaried or not, you need to consider Income Tax (TOI) Act 2005 (ITTOIA) as to whether Partners fall foul of the conditions that deem Partners to be employees or not.

That you have an Accountant and an LLP structure suggests time has already been invested in structuring the business to partially meet the private tuition exemption, so it seems the best way forward is to ask these questions of your Accountant.

As for other competitors, learn from them in terms of what they deliver/how they deliver it, but don't compare in terms of their tax position as you simply don't know anything about them, maybe they don't care about VAT and happy to risk getting away with it, maybe they are small and don't want to grow, maybe they have paid for their advice and got the best outcome for them.

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Replying to Jason Croke:
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By Roblondon
20th Nov 2023 10:48

Hi Jason,
Thanks for this.

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