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<DIV><FONT size=2 face=Arial>Just a quick follow-up. Of course what Jaqui says
re the facts of VAT registration is correct, and as long as you can demonstrate
to HMRC that you are or will be carrying out *any* business activity (even if
the bulk of your activity is non-business), then you can elect to register for
VAT, and HMRC cannot refuse you.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Where I would differ slightly
is from the opinion that "it really is not worth the
hassle of the extra accounting unless you are quite close to the
threshold."</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>For a station in an ongoing routine trading
position, revenue-in, revenue-out, that might be the case (or might not if they
are grant-funded but have a lot of VAT expenditure). But for a station in the
start-up phase when there is typically a lot of money outside the scope of VAT
coming in (grants, donations, fundraising etc), but a lot of VAT going out
(buying transmiters, equipment, services etc), then I would suggest it is almost
certain to be worth the (very limited) extra accounting work for what is
effectively a 17.7% discount on all VATable outgoings.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>We were a net recipient of around £10,000 VAT in
our first 18 months, and could have chosen to de-register at that point and
waved the VATman thanks and goodbye. That's quite proper and legal.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Bear in mind that for equiment of lasting value
(not for services) you can reclaim the VAT on expenditure prior to registration
as well. It has to be for items you still have and that are of continuing value
(eg studio equipment) and it is rare to go back more than 3 years, but it
can be done. A reasonable approach to claiming back pre-reg VAT is to apply
a similar principle as straight-line deprececiation - claim the full VAT on
things bought in the last year, two-thirds of the VAT for stuff from the
previous year, and one-third for stuff bought up to three years prior.
As long as it is for durable items that you have the VAT invoices for there
should be no problem. We had no problem with it.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>As it happens we stayed registered after set
up, even though we are well below the threshold. In some quarters we are
net gainers, but mostly we have to make a small payments of VAT - but
this is not a loss as such - we are only handing over VAT received from
customers. Also we have found occasionally it's useful to be
registered for VAt because trade suppliers, discount warhouses,
councils and agencies regard having a VAT number as evidence that you are
running a bona-fide busines.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>The only real downside to VAT is if the bulk of
your supplies are to non-registered people who can't claim back the VAT, since
that effectively raises your prices 20% for them. However if most of your
business sales are, for example, to local businesses, the council, charity
advertising etc, then your customers can most probably reclaim the VAT and
it will make no difference to them.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Jaqui is right that partial exemption is a
minefield. It is not something you would want to get into if there's an easier
way, and is unlikely to be of huge benefit. HMRC's internal guidance to
officers is that it should be used only where there is no other sensible course,
and that it has to be set up and calculated very carefully - a lot of work.
Bottom line: stay away from it.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>However, that does not preclude ad hoc
exemption of specific occasional activities as long as you keep a proper record
of them. Most typically if you are running a fundraiser event and don't want to
charge VAT on the entrance tickets or sales at the event, you can elect to
declare that specific event an non-business activity outside the scope of VAT,
and as long as you don't try to claim back the VAT for anything bought for it
(eg prizes, posters, what have you) then you don't have to charge VAT on the
income either.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Alex</FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; PADDING-LEFT: 5px; PADDING-RIGHT: 0px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="FONT: 10pt arial; BACKGROUND: #e4e4e4; font-color: black"><B>From:</B>
<A title=jaqui.devereux@commedia.org.uk
href="mailto:jaqui.devereux@commedia.org.uk">jaqui devereux</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=transplanfm@hotmail.com
href="mailto:transplanfm@hotmail.com">Ian Hickling</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Cc:</B> <A title=cma-l@commedia.org.uk
href="mailto:cma-l@commedia.org.uk">cma-l</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Tuesday, February 08, 2011 10:25
AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [cma-l] Charitable
Status</DIV>
<DIV><BR></DIV>Dear all<BR><BR>Just as a point of clarification re VAT
registration:<BR><BR>It makes no difference at all whether you are a CLG, CIC,
charity or charitable company. If the sources of your income fall within
the scope of VAT, and the total of those sources in scope exceed the VAT
threshold, currently £70,000, then you MUST register for VAT. Whether
income is within the scope depends on its nature. So an out and out
grant will not be, a service level agreement may or may not be (even if for
education/training) depending on the wording and whether the funding body
treats it as within the scope, ads and sponsorship etc almost certainly will
be. Any of the above organisation types can register voluntarily for VAT
but it really is not worth the extra accounting hassle unless you are quite
close to the threshold (look on the HMRC website for the rules on VAT partial
exemption calculations requirements). Partial exemption is a
minefield!<BR><BR>Hope that helps<BR><BR>Jaqui<BR><BR>
<DIV class=gmail_quote>On 5 February 2011 18:57, Ian Hickling <SPAN
dir=ltr><<A
href="mailto:transplanfm@hotmail.com">transplanfm@hotmail.com</A>></SPAN>
wrote:<BR>
<BLOCKQUOTE
style="BORDER-LEFT: rgb(204,204,204) 1px solid; MARGIN: 0pt 0pt 0pt 0.8ex; PADDING-LEFT: 1ex"
class=gmail_quote>
<DIV><BR>As I have said many times - the obvious solution is to run three
businesses concurrently:<BR> <BR>1 - The Community Radio station as a
CIC which does not return a profit.<BR>2 - A Charitable arm which can accept
charitable donations which does not retrun a profit and feeds the
station.<BR>3 - A commercial limited company which can return a profit
from a wide range of activities, is VAT-registered and feeds the
station.<BR> <BR>It's sensible business practice - not rocket
science.<BR> <BR>To lose that much VAT by default is just plain stupid
- sorry!<BR> <BR>
<HR>
From: <A href="mailto:office@ccr-fm.co.uk"
target=_blank>office@ccr-fm.co.uk</A><BR>To: <A
href="mailto:info@a-bc.co.uk" target=_blank>info@a-bc.co.uk</A>; <A
href="mailto:cma-l@commedia.org.uk"
target=_blank>cma-l@commedia.org.uk</A><BR>Date: Sat, 5 Feb 2011 14:34:48
+0000<BR>Subject: Re: [cma-l] charity status<BR><BR>
<DIV>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">Glyn n
all</SPAN></FONT></P>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">Thanks Glyn
.
As I said
. It looks like everyone is fumbling around in the dark. Either
we can as a fraturnity / brotherhood or we cant
.. which is it
.
?? I dunno?</SPAN></FONT></P>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">Regards</SPAN></FONT></P>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">Nick</SPAN></FONT></P>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<DIV>
<DIV style="TEXT-ALIGN: center" align=center><FONT size=3
face="Times New Roman"><SPAN style="FONT-SIZE: 12pt" lang=EN-US>
<HR align=center SIZE=2 width="100%">
</SPAN></FONT></DIV>
<P><B><FONT size=2 face=Tahoma><SPAN
style="FONT-FAMILY: Tahoma; FONT-SIZE: 10pt; FONT-WEIGHT: bold"
lang=EN-US>From:</SPAN></FONT></B><FONT size=2 face=Tahoma><SPAN
style="FONT-FAMILY: Tahoma; FONT-SIZE: 10pt" lang=EN-US> <A
href="mailto:glyn.m.roylance@googlemail.com"
target=_blank>glyn.m.roylance@googlemail.com</A> [mailto:<A
href="mailto:glyn.m.roylance@googlemail.com"
target=_blank>glyn.m.roylance@googlemail.com</A>] <B><SPAN
style="FONT-WEIGHT: bold">On Behalf Of </SPAN></B>Associated Broadcast
Consultants<BR><B><SPAN style="FONT-WEIGHT: bold">Sent:</SPAN></B> 04
February 2011 22:59<BR><B><SPAN style="FONT-WEIGHT: bold">To:</SPAN></B>
Office - ccr-fm<BR><B><SPAN style="FONT-WEIGHT: bold">Cc:</SPAN></B>
CMA-L<BR><B><SPAN style="FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [cma-l]
charity status</SPAN></FONT><SPAN lang=EN-US></SPAN></P></DIV>
<P><FONT size=3 face="Times New Roman"><SPAN
style="FONT-SIZE: 12pt"></SPAN></FONT> </P>
<P><FONT size=3 face="Times New Roman"><SPAN style="FONT-SIZE: 12pt">Yes we
had the same experience. Essentially we discovered that a community
radio station could not be a charity unless it fulfilled one of a number of
narrow categories . ie: if we decided to be a religious radio station
then bingo, but we did not want to go that way.</SPAN></FONT></P>
<DIV>
<P><FONT size=3 face="Times New Roman"><SPAN
style="FONT-SIZE: 12pt"></SPAN></FONT> </P></DIV>
<DIV>
<P><FONT size=3 face="Times New Roman"><SPAN style="FONT-SIZE: 12pt">Instead
we went down the CIC route. It was "sold" to us as being equivalent to
being a charity, but from a recent approach from Inland Revenue I think it
might have some drawbacks compared to being a charity (they seem to treat us
like any other ommercial Ltd company) - but I'm not an
expert.</SPAN></FONT></P></DIV>
<DIV>
<P><FONT size=3 face="Times New Roman"><SPAN
style="FONT-SIZE: 12pt"></SPAN></FONT> </P></DIV>
<DIV>
<P><FONT size=3 face="Times New Roman"><SPAN style="FONT-SIZE: 12pt">Glyn
Roylance</SPAN></FONT></P></DIV>
<DIV>
<P><FONT size=3 face="Times New Roman"><SPAN style="FONT-SIZE: 12pt">GLOSS
FM.org</SPAN></FONT></P></DIV>
<DIV>
<P style="MARGIN-BOTTOM: 12pt"><FONT size=3 face="Times New Roman"><SPAN
style="FONT-SIZE: 12pt"></SPAN></FONT> </P>
<DIV>
<P><FONT size=3 face="Times New Roman"><SPAN style="FONT-SIZE: 12pt">On 4
February 2011 18:16, Office - ccr-fm <<A
href="mailto:office@ccr-fm.co.uk" target=_blank>office@ccr-fm.co.uk</A>>
wrote:</SPAN></FONT></P>
<DIV>
<DIV>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt">Dear All</SPAN></FONT></P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt">Just a quick enquiry
.
Does anyone know how many Community Radio Stations in our
fraturnity/brotherhood are actually charities ?? I
know that we looked into it 7 years ago but the process was a complete
nightmare. Also, in 2004 I clearly remember that the Charities commision
simply had NO category for radio
.. it was almost as if they didnt
understand it
>?>?
I think the key to it and the crux of the matter was that we were
technically all over the place in what we were providing
in
otherwords, providing a lot, but nothing specific
!
almost a jack of all
trades but master of none</SPAN></FONT></P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt">Have any of you guys had a
similar experience
?
I seem to recall that there is a station on the south coast as a charity
??
plus Regen (near to us) in
South Manchester who do run Wythenshawe FM and ALL FM
outside of
that, Im a bit clueless to be honest
. Any ideas ?</SPAN></FONT></P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt">What about Sheffield and of
course the CMA ?</SPAN></FONT></P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt">Many thanks</SPAN></FONT></P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt">Regards</SPAN></FONT></P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt"></SPAN></FONT> </P>
<P><FONT size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt">Nick</SPAN></FONT></P></DIV></DIV>
<P style="MARGIN-BOTTOM: 12pt"><FONT size=3 face="Times New Roman"><SPAN
style="FONT-SIZE: 12pt"><BR>_______________________________________________<BR><BR>cma-l
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<P style="MARGIN-BOTTOM: 12pt"><FONT size=3 face="Times New Roman"><SPAN
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</DIV><BR>_______________________________________________<BR><BR>cma-l
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Media Association - <A href="http://www.commedia.org.uk"
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clear=all><BR>-- <BR>Jaqui Devereux<BR>Director, Community Media
Association<BR><BR><BR>
<P>
<HR>
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