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Village hall charity VAT registration a good idea?

Is registering a charity for VAT to reclaim inputs on building work a good idea?

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I have been asked by local village hall for advice on registering for VAT as they want to build a multi-use-games-area (build in the loosest sense, looks to be setting up pitches on the recreation area)

Cost will be about £70k plus VAT of around £14k which they would like to reclaim. But if they register to reclaim this I think they need to charge VAT on the hall bookings? And am I correct in thinking all bookings will need to be via a subsidiary as this is business activity - have I read the HMRC notice correctly?  I also spoke to HMRC earlier who said the same. If anyone has any alternative ideas I'd be very grateful as this is only my interpretation. If this is a straighforward yes, register but reclaiming needs to be restricted etc or no this is why I am happy to act for them but I suspect I might need to pass on to someone with more charitable VAT experience. 



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By Mr_awol
16th Apr 2018 15:12

Are they going to hire out the MUGA or provide it as a community service? Where is the £84k coming from?

What is your connection/engagement? Are they after a freebie/charity rate, or prepared to pay? I'd be wary of sticking my neck out on a reduced rate if I wasn't pretty sure of my ground - you need to strike the right balance between risks and rewards of advising them...........

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to Mr_awol
16th Apr 2018 15:38

Hiring out for a nominal fee for the good of the community. Funds from S106 housing development of £45k with the rest from fundraising.
Only income is from hall bookings.

I act for the hall manager in another capacity and she was after setting up an electronic bookeeping system rather than the current paper records used for the hall as well as the VAT query and is happy to pay for the setup fees.

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16th Apr 2018 15:42

It's worth checking who owns the hall and any terms of occupancy ie lease arrangements
If it's the local Parish Council they should have the work invoiced to them and they can claim back the VAT in the normal way
I'm the treasurer of our local recreation/sports ground and this was done when we rebuilt the pavilion

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27th Aug 2018 12:13

Hello, I wonder if anyone can give me some advice on whether it is a good idea to register for VAT? We completed an extension to our village hall a year or so ago funded by some grants and our own fundraising. We are trustees of the Village Hall. We have recently been advised by our Parish Council that we can register for VAT with HMRC specifically to reclaim VAT from the build and then deregister 2 weeks later. Is this actually true? It seems far too good to be true. We would be grateful for any advice on the matter. Many thanks.

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28th Aug 2018 10:10

Who owns the village hall ?
If the parish council this may help you
I am treasurer of the local recreation ground, which was leased to our local parish council who in turn leased it to the recreation ground - a small charity
When we had our new pavilion built the parish council paid the bill and reclaimed the VAT
We paid the net amount to the parish council

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