hello, I'm wondering if anyone can give me some advice on whether it is a good idea for our Village Hall 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. Our Parish Council have recently advised us that we can register with HMRC specifically to reclaim VAT from the build and then deregister 2weeks later. Is this actually true? It seems far too good to be true! We would be grateful for any advice on this matter. Many thanks.
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You can only claim VAT if it relates to costs incurred in making taxable supplies. Are you making such supplies?
Even if you are making taxable supplies and in a position to reclaim the pre-registration VAT incurred on the extension, you'd have to repay most of it upon deregistration.
Registering for VAT would mean that you have to add VAT to all your charges.
If you deregister for VAT you have to repay all the VAT you have reclaimed on assets worth over £6,000 at the date of deregistration.
This may help depending on who owns the village hall
I am treasurer of a recreation ground which is leased by our parish council and then sub-leased to the recreation ground - a small charity
When we built our new pavilion the parish council paid for it and reclaimed the VAT . We paid the net ex VAT to them
Thank you everyone for your replies. They have confirmed what we thought! We were sure this was too good to be true, but the Parish council were adamant that we could do this. The village itself owns the Village Hall and we are trustees of it. The Parish Council do not own the hall. If the hall were ever to be sold the proceeds would be divided up between the villagers.
The village itself owns the Village Hall and we are trustees of it.
I hope you have "the village" well defined.
2 more questions
Are the trustees appointed by and acting for the village? If so who appoints them?
Is there any form of occupancy agreement?
Don't be so quick to accept the negative views. Ask your Parish Clerk where they got the information from first.
When I was involved in a local non profit preschool the parish clerk was part of an information network which circulated little known quirks about unusual circumstances and it was rare that they got it wrong.
On the other hand they could have just been chatting in the pub but surely it has to be worth a bit more specialist research