Small Village Hall charity and VAT

Very small village charity, should it register for VAT

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Hi all

I volunteer at a small village hall charity in rural Herts. it is registered with Charity Comm. T/o less than 15k pa - All income is from hire of hall & kitchen to the local people. Recently it raised 25k to carry our R&M. Can we register for VAT and de-register after 6 months to benefit from vat recovery on R&M? Should we become a limited company?  Also where can I find ac accountant to help with some pro bono work (just once or twice, please)? Many thanks

P

Replies (11)

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By Cat's whiskers
16th Jun 2020 10:48

I imagine you'd be best off asking fro pro bono advice within the local community.

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RLI
By lionofludesch
16th Jun 2020 11:35

You're going to get some very hard stares from HMRC if you carry out your plan.

They're not daft.

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Replying to lionofludesch:
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By the_drookit_dug
16th Jun 2020 11:44

I suspect the obtaining of the voluntary registration is the snag in this cunning plan.

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Replying to the_drookit_dug:
RLI
By lionofludesch
16th Jun 2020 11:52

Not sure about that but the split of taxable to exempt income might be.

Hard to say.

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Replying to lionofludesch:
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By the_drookit_dug
16th Jun 2020 11:59

I was generously assuming an option to tax would be possible. I should probably stop making any assumptions at this stage, nor give it any more thought. Lol.

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Replying to the_drookit_dug:
paddle steamer
By DJKL
16th Jun 2020 12:32

Catch with that will possibly be pricing re the room hire, at £15k a year rents and £25k repairs, opting to tax looks to have very short lived benefits if those who hire the hall are not vat registered (and I suspect they are not)

I am here presuming the provision of short term room hires are caught by an option to tax?

Personally, if I were the OP, I would concentrate of sorting out Gift Aid rather than fiddling with messy vat.

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Replying to DJKL:
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By the_drookit_dug
16th Jun 2020 12:55

Agreed. Definitely messy - the charity would need to ensure that it was undertaking taxable activities in order to give rise to an entitlement to recover the VAT on the repairs, meaning VAT on income. Plus fafting about with registering and subsequent de-registering, with HMRC likely to view the whole thing with scepticism.

I wouldn't go there.

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By Matrix
16th Jun 2020 11:56

I do some pro bono work for small charities where I live (also in rural Herts), but sorry I would not touch this as I don’t think my PI would cover it and it probably wouldn’t work.

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By Paul Crowley
16th Jun 2020 12:01

Do you mean Co limited by guarantee? Any reason suggested by person with the idea? Result would be more admin for whoever currently produces the accounts. Need to deal with HMRC and file electronically with new charity page once every 5 years or so. These can get fogotten or ignored. £200 if late

Try a google search for say, charity vat and get an expert to listen to the idea

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chips_at_mattersey
By Les Howard
16th Jun 2020 13:44

No.
Suffer the loss of VAT on R&M. (Make sure any works to your disabled toilet are zero-rated!)
The solution to register temporarily will certainly not work given the values you have quoted. You would be heavily out-of-pocket.

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Replying to leshoward:
paddle steamer
By DJKL
16th Jun 2020 13:56

Les, settle my curiosity, would an Option to Tax, were there one (which I do not think there ought), actually have applied to say hall hires for a few hours e.g for a kids birthday party/event?

Edit- additional question- would the hire of such a room potentially be standard rated for vat purposes anyway, even if an option was not in place? (Service provision)

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