[cma-l] VAT (was:Re: Joint PRS/PPL licences)

[Phil Edmonds]

On 04/07/2016 14:05, Bill Best wrote:
> For stations that do not make charges to customers - for example,
> stations not carrying advertisements - then it appears that there is
> even more incentive to register for VAT.

The following is based on my own knowledge on VAT from looking into this 
in the past (we're talking 10-15 years ago, but I don't think things 
have changed that much) and of course I am not a qualified accountant.


In a nutshell VAT is a tax on the "end consumer". When you are a VAT 
registered business you can offset the VAT you paid on goods and 
services that you have used in the production of your product against 
the VAT you charge to your customers for your goods or services, thus 
moving the liability for the tax down the supply chain to the end user.

If you do not actually sell anything you are not eligible to be VAT 
registered as in this case you are the "end consumer" and as such you 
have to pay the VAT.


As for being VAT exempt as a charity, as other have said this is not 
blanket and having spent the best part of a couple of decades buying 
things acting for several charities I've certainly paid plenty of VAT!

"Talking newspapers" for the blind are exempt from VAT, and I recall 
that back, probably in the early 1990s, if not before, the Hospital 
Broadcasting Association run a campaign, with no success, to get their 
member stations who are almost exclusively registered charities to gain 
VAT exempt status as they provide a "similar" service as talking newspapers.

It's worth remembering that while Community Radio stations have to be 
"not for profit", only a small number are registered charities. Hospital 
radio stations normally have "health" related chartable objects. 
Community Stations who are charities tend to have "education" related 
objects. Just "doing radio" is not a charitable activity, but of course 
"doing radio" can be "non profit" and provide "social gain" etc.

Phil.