Subject: Vat & tax - need advice, not sure where to start
Hi All,
Firstly I would like to thank you in advance for any help that is giving.
We have a trading arm to our Scout Group, providing Uniform and Camping equipment to raise much needed funds for our chairty, it has been so successful that we will have to register for VAT soon and really need some advice on the following points. We are a registered charity and use the charity number for our shop as all the profits go back to the group.
1. Do we have to register the shop at Companies House ?
2. When we register for VAT do we register the Shop or the Scout Group(If we register the group will we have to pay VAT on SUBS?)
3. Is the shop exempt from coropration tax ?
Im sure I will think of more questions, however I feel this will get me started
Regards
Steve
Hi shop4scouts, great that your trading is proving so successful!
In terms of your questions, a good place to start is NCVO's Good Trading Guide. It has lots of information about the legal side and planning for the future. It also lists other sources of help, people you could speak to about your specific questions.
Can anyone else recommend other sources of help?
Hi
This opens the thorny issue of charities trading. For it to be exempt from tax it has to be primary purpose, which from the brief details given I don't think that it can be. There are also levels of trade under which you can ignore any trade as they are de-minimis.
You can structure the trading arm in such a way that any profits earned can be gift-aided to the charity so that you are not exposed to corporation tax. I suggest that you see a firm of accountants who could advise on the vat and tax aspects of the trade.
regards
Jacquie
Sue Fidler also suggested on Twitter that you contact the VAT ofice:
"@knowhownonprof simply contact the VAT office or download the registration form.. its all in the HMRC website.."
The HMRC say that you will have to register at Companies house and that all income will subject to VAT. Your best bet may be to call the Charities helpline at HMRC on 0845 302 0203 or visit their site here.
This comment was last edited on Sep 01, 2010
Hello Steve
Charity trading and tax is a complex area, so you may well need professional advice. (When Atul Patel and I wrote the Good Guide to Trading, we asked a lawyer to write the chapter on tax and legalities.)
In addition to the Good Trading Guide you might want to look at various online resources produced by the Finance hub to help you understand the issues. For example the Finance Hub guide to selling goods and services and their introduction to taxation.
Perhaps the Scouts Association can assist, particularly if this is an issue for several Scout groups?
Best wishes
Ros
HI All,
Many thanks for all your help, just to keep you updated, we are now registering the company and will be giving the profits we make to the scout group
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