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Vat treatment of Trade Association Subscriptions

Vat treatment of Trade Association Subscriptions

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I have a vat registered client (Trade Association) that charges an annual subscription of £35. For this they receive a quaretrly newsletter (approximate value £10 per annum) and insurance (approximate value £5 per annum) with the balance effectively a donation. Should this be treated as one supply of the largest component part (donation and outwith the scope of vat) or broken down between the component parts?

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By George Attazder
17th Nov 2011 10:45

I'd say it was certainly a single supply...

... of a subscription conferring set benefits.  If it doesn't fall within Group 9 of Schedule 9 VATA 1994 (reproduced below), then it would be standard-rated in my opinion.

"The supply to its members of such services and, in connection with those services, of such goods as are both referable only to its aims and available without payment other than a membership subscription by any of the following non-profit-making organisations—
 (a) a trade union or other organisation of persons having as its main object the negotiation on behalf of its members of the terms and conditions of their employment;
 (b) a professional association, membership of which is wholly or mainly restricted to individuals who have or are seeking a qualification appropriate to the practice of the profession concerned;
 (c) an association, the primary purpose of which is the advancement of a particular branch of knowledge, or the fostering of professional expertise, connected with the past or present professions or employments of its members;
 (d) an association, the primary purpose of which is to make representations to the Government on legislation and other public matters which affect the business or professional interests of its members.
 (e) a body which has objects which are in the public domain and are of a political, religious, patriotic, philosophical, philanthropic or civic nature."

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By Les Howard
17th Nov 2011 12:09

Yes, but

Is is a non-profit making organisation? Does the Constitution or other governing document provide for this? What happens if surpluses are generated? Does the organisation fall clearly within one of the five categories indicated in the previous post?

There is a concession, whereby the supply can be treated as a number of supplies. This can be helpful with a zero rated magazine (assuming it is hard copy, not electronic), whether or not the main supply is deemed to be taxable or exempt.

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Replying to EthanBryan:
By david2211
28th Nov 2011 14:28

Vat and Trade Association Subscriptions

Thank you both for your posts. (d) is the primary purpose although the body is a company limited by guarantee therefore profits can't be distributed to shareholders (members) as there are no shareholders as such. I'll have to check the Articles/Memorandum of Association to ensure the primary purpose is worded as in (d) regardless of whether there may be other aims.

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