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CONTRUCTION OF BICYCLE PATHS EXEMPT ?

Vat query

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I sit on a trust that has been asked to help fund the design and installation of some bicycle tracks for community use with the local park area. The charity running the project is not vat registered. The supplier, a commercial business appears to be charging 20% vat on the supply and installation costs of the facility. I was wondering if this was correct as it seems landscaping, new builds and the provision of sports facilties can be exempt. I am unsure if this is for the construction or just the ongoing use?  Any help would be appreciated.

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RLI
By lionofludesch
27th Sep 2020 18:22

Are you claiming these paths are landscaping, new builds or the provision of sports facilities ? Which is it ?

Are they paths - or tracks ? You use both words. "Paths" implies to me that the purpose is to get the rider from A or B (or any other letters of your choice). Getting from A to B is not, in my mind, a sport*. "Tracks" on the other hand, suggests some kind of velodrome.

*I have to say here that my definition of "sport" is considered narrow by many folk.

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Replying to lionofludesch:
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By John Isabel
28th Sep 2020 14:20

lionofludesch wrote:

*I have to say here that my definition of "sport" is considered narrow by many folk.

Ditto. I refuse to call Darts, tiddlywinks, Golf or Chess 'sports' and dislike the inclusion of shooting (hobby, not sport) and Cricket (game, not sport) also.

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By brash
27th Sep 2020 20:46

It is a mountain bike trail within the park for the local community to use. It might be
stretching it but this will include landscaping

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chips_at_mattersey
By Les Howard
28th Sep 2020 09:05

The construction is unlikely to be zero-rated.
I wonder who owns the park; if a local authority, can the supply be made to them, and VAT recovered on their VAT Return? You will need to review the funding to ensure this arrangement is proper.

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By Jdopus
28th Sep 2020 12:57

I actually disagree with Les. If this is a track solely for mountain biking within a park I think it's worth at least a conversation with the builder. They're the one who has to make the final call since they're responsible for the VAT, but in my experience a lot of suppliers aren't familiar with VAT rules like this one and might be willing to review the VAT position if you point them to the government guidance.

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By The Dullard
28th Sep 2020 14:17

What 2government guidance" do you think's relevant oh wise one?

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Replying to The Dullard:
RLI
By lionofludesch
28th Sep 2020 16:15

Yay ! Dulls is back !

Been on holiday for a few months ?

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Replying to The Dullard:
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By Jdopus
29th Sep 2020 10:24

The definition of a sports facility:

"5.2 A sports facility
Premises are sports facilities if they’re designed or adapted for playing any sport or taking part in any physical recreation, such as swimming pools, football pitches, dance studios and skating rinks."

I was replying to the two posts above from les and Lion to suggest that a trail specifically designed for mountain biking as the OP suggests probably does meet this definition of a sports facility. Or at least it's subjective enough that the claim could be attempted and left open to challenge by HMRC if they disagree if that's all it rests on.

No need to be a c**t if you disagree.

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By The Dullard
29th Sep 2020 11:06

Actually, allow me to carry on being a c**t. How, is that relevant to (what appears to be) a supply of construction services?

It seems only to be relevant to a supply of land; it's relevance being that such a supply is generally standard-rated, but may be exempt in certain circumstances.

For construction services, exempt isn't an option; the only options are standard-rated (the norm), lower-rated (in limited specific circumstances) and zero-rated (in even more limited). So I remain curious how you summoned up the wisdom to disagree with Les.

In my view, people just quoting random 5h1t they found on the internet just serves to confuse matters, both for the OP (who seems confused enough anyway) and those that come to read the thread later. Don't be like Justin.

The way this tax malarkey works is that there are a whole bunch of rules; complicated rules that aren't always logical. The aim is to correctly apply those rules. Part of the process of correctly applying the rules is to identify the rules that apply to the matter in hand. Picking rules that don't apply to the matter in hand might be seen as severe stupidity.

Lion was just echoing parts of the OP and querying which was the correct analysis. That's just applying the first rule of VAT; establishing who is supplying what to whom. Les, like myself, had formed a view that what was being supplied was construction services, making the precise details an irrelevance.

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By Jdopus
29th Sep 2020 11:12

I'm happy for you to be a c**t as long as you have reason to be a c**t and aren't just being passive aggressive. Since you've given your reasons and are now being direct rather than passive aggressive, I can respect that. Fair enough, you're right and I was wrong.

As you say, I was responding to Lion and Les who seemed to have accepted that the question of whether it was a sports facility or not was a relevant question and pointing out that a mountain biking track probably was.

You're right, now that I've read your post and checked the legislation I was on an irrelevant tangent.

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