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</head><body><p><em>"Where else in the conduct of a normal business are you expected to pay for a service voluntarily and at your own instigation?"</em></p><p>Not sure what you mean by voluntarily - the PPL/PRS payments aren't voluntary! But there are certainly many licences and services that you are expected to apply and pay for at your own instigation: </p><p>TV licence, Public Entertainments Licence, Lottery Licence, Planning Permission, the reproduction of OS maps or map data, the publication of Tide Tables or other data from the UK Hydrographic office... I could go on.</p><p><em><br></em></p><p><em>"I still maintain that - regardless of colloquial terminology - as they are subject to VAT, these royalty payments are "services" - not "licences"."</em></p><p>The use of the word 'licence' for a grant of limited rights to use intellectual property is in no way a 'colloquialism' - it is the conventional, accepted and standard term for such agreements, and as far as I know always has been, regardless of whether those agreements are made by statutory bodies or otherwise. See <a href="https://www.gov.uk/guidance/licensing-intellectual-property">https://www.gov.uk/guidance/licensing-intellectual-property</a></p><p><em></em><em>"The VAT Regulations make the distinction very clearly and they are firmly enforced as we all know."</em></p><p>Yes indeed, but VAT law has its own specific definitions and usages- for example the VAT meaning of 'business' is not exactly the same as the commonplace meaning of business, nor even as used for Income and Corporation Tax purposes!</p><p>Payments under IP licence agreements are subject to VAT, as payments for “intellectual services” - ie it is the service of providing of a licence by way of business that is VAT liable, rather than the licence itself. The statutory licences you previously referred to are not provided "by way of business". A fine distinction maybe, but VAT legislation is stuffed with fine distinctions!</p><p>Under the VAT Directive, certain activities that are seen as being in the public interest are VAT exempt, and that is the basis on which a number of statutory licences are outside the scope of VAT. That provision does not, however, provide exemption from VAT for every activity performed in the public interest, but only for those which are listed and described in great detail in it.</p><p>The collecting societies could potentially have applied for the exemption from the scope of VAT in the public interest under provisions that were brought in for 'cultural bodies' in 2006, and for all I know they did. (London Zoo did, in a protracted series of cases that it eventually won). However, one of the conditions for being a "cultural body" for VAT purposes is that it must be managed and administered voluntarily by people with no direct or indirect financial interest in the activities of the body, and the management of PPL and PRSfM certainly do not do their work voluntarily*.</p><p> Alex</p><p>*<span style="font-size: 8pt;"> in 2014 PPL's CEO received £590k, the the Chairman £180k, plus pension rights, and non-executive directors receive aggregate fees of £83k, out of total payments to staff of £14.3m</span>.</p><p><br></p><blockquote type="cite"><div id="ox-4fda187740" class="ox-4fda187740-hmmessage">On 04 July 2016 at 08:20 Ian Hickling <transplanfm@hotmail.com> wrote:<br><br><div dir="ltr"><span style="color: #000000;">Thanks Alex - clarity personified.<br>Following on from that, let's look at another aspect of the operation of the collecting societies.</span><div><span style="color: #000000;">Where else in the conduct of a normal business are you expected to pay for a service voluntarily and at your own instigation?</span></div><div><span style="color: #000000;">PPL and PRSfM should determine from published information - as anyone can - who is broadcasting and then should generate a conventional Invoice explaining in proper legal terms why the debt has been incurred.</span></div><div><span style="color: #000000;">I still maintain that - regardless of colloquial terminology - as they are subject to VAT, these royalty payments are "services" - not "licences".</span></div><div><span style="color: #000000;">The VAT Regulations make the distinction very clearly and they are firmly enforced as we all know.<br id="ox-4fda187740-FontBreak"></span><br><div style="line-height: 21.3px; color: #444444; background-color: #ffffff;"><p class="ox-4fda187740-ecxMsoNormal" style="line-height: 22.72px;"><span style="font-family: Calibri; font-size: medium;"><span style="line-height: 22.72px;"><span style="line-height: 22.72px; color: #222222;">Ian Hickling</span></span></span></p></div><p class="ox-4fda187740-ecxMsoNormal" style="line-height: 22.72px; color: #444444; background-color: #ffffff;"><span style="line-height: 22.72px; color: #222222;"><span style="font-family: Calibri; font-size: medium;">Partner</span></span><span style="font-size: 12pt; font-family: Calibri, sans-serif; line-height: 22.72px;"><br style="line-height: 22.72px;"><br style="line-height: 22.72px;"><a style="line-height: 22.72px; color: blue; cursor: pointer;" href="http://www.transplanuk.com/" target="_blank"><span style="line-height: 22.72px; color: #1155cc; text-decoration: none;"><img id="ox-4fda187740-ecx_x0000_i1025" style="line-height: 22.72px; border: none;" src="https://ci4.googleusercontent.com/proxy/2SkDsnIzSZgRbNnNKBSiwxiFhFQWRGV55mTjVL23fulnJpstZmYxeKrrYefY4qxiSgkMrAETld64XINLXCsujE_zI5gAsQyWeCWvHixcrNYtar3Sij4YlVBgN2NSQ-n2DsgZvrnpWZlfwCQ=s0-d-e1-ft#http://www.transplanuk.com/wp-content/uploads/2014/07/transplan_UK_weblogo_190x60.png" alt="" border="0"></span></a></span></p><div style="line-height: 21.3px; color: #444444; background-color: #ffffff;"><p class="ox-4fda187740-ecxMsoNormal" style="line-height: 22.72px; font-family: 'Times New Roman', serif;"><span style="font-size: small;"><em style="line-height: 22.72px;"><span style="line-height: 22.72px; font-family: Arial, sans-serif; color: #222222;">Office: 016 3557 8435  (07h to 22h GTS)</span></em></span></p></div><div style="line-height: 21.3px; color: #444444; background-color: #ffffff;"><p class="ox-4fda187740-ecxMsoNormal" style="line-height: 22.72px; font-family: 'Times New Roman', serif;"><span style="font-size: small;"><em style="line-height: 22.72px;"><span style="line-height: 22.72px; font-family: Arial, sans-serif; color: #222222;">Car: 075 3098 0115 (only responds when driving)</span></em></span></p></div><div style="line-height: 21.3px; color: #444444; background-color: #ffffff;"><p class="ox-4fda187740-ecxMsoNormal" style="line-height: 22.72px; font-family: 'Times New Roman', serif;"><em style="line-height: 22.72px;"><span style="line-height: 22.72px; font-family: Arial, sans-serif; color: #222222;"><span style="font-size: small;">6 Horn Street, Compton, NEWBURY, RG20 6QS</span></span></em></p></div><br><br><div><hr id="ox-4fda187740-stopSpelling">From: tlr@gairloch.co.uk<br>To: cma-l@mailman.commedia.org.uk<br>Date: Sun, 3 Jul 2016 13:59:17 +0100<br>Subject: Re: [cma-l] Joint PRS/PPL licences<br><br><div class="ox-4fda187740-ecxWordSection1"><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;">Ian, the collecting societies <strong>are</strong> authorized by statute (the 1988 Copyright Act). But it any event, legal agreements granting permissions to use copyright are conventionally referred to as ‘licences’, whether issued by a private holder, commercial company or collecting society. A licence is a formally granted consent to do something which the licensor otherwise has the right to restrict.</span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;"> </span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;"> I mentioned this in a posting a few days. It is in return for this statutorily granted privilege that they are subject to the legal option of a user deeming their own licence and taking recourse to the Copyright Tribunal.</span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;"> </span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;">NB, and strictly playing devil’s advocate, they are <strong>not</strong> commercial organizations any more than the typical CR station, just a lot bigger and less reputable in their behaviour. They are not-for-profit membership societies incorporated as Companies Limited by Guarantee. </span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;"> </span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;">See also PPL’s constitution at http://www.ppluk.com/Documents/Code%20of%20Conduct%20PDFs/PPL%20Articles%20of%20Association%202016.pdf</span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;"> </span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;">Alex </span></p><p class="ox-4fda187740-ecxMsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif; color: #1f497d;"> </span></p><div><div style="border: none; border-top: solid #E1E1E1 1.0pt; padding: 3.0pt 0cm 0cm 0cm;"><p class="ox-4fda187740-ecxMsoNormal"><strong><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif;">From:</span></strong><span style="font-size: 11.0pt; font-family: 'Calibri',sans-serif;"> cma-l-bounces@mailman.commedia.org.uk [mailto:cma-l-bounces@mailman.commedia.org.uk] <strong>On Behalf Of </strong>Ian Hickling<br><strong>Sent:</strong> 02 July 2016 14:53<br><strong>To:</strong> The Community Media Association Discussion List <cma-l@mailman.commedia.org.uk>; Bill Best <bill.best@commedia.org.uk>; colin@susyradio.com<br><strong>Subject:</strong> [cma-l] Joint PRS/PPL licences</span></p></div></div><p class="ox-4fda187740-ecxMsoNormal"> </p><div><p class="ox-4fda187740-ecxMsoNormal"><span style="font-family: 'Calibri',sans-serif; color: black;">As ever - thanks Bill for taking the trouble to spell out the situation.</span></p><div><p class="ox-4fda187740-ecxMsoNormal"><span style="font-family: 'Calibri',sans-serif; color: black;">I would however - at the risk of invoking terminal boredom on the part of some of our friends - query just one word - "licence!".</span></p></div><div><p class="ox-4fda187740-ecxMsoNormal"><span style="font-family: 'Calibri',sans-serif; color: black;">These are not licences.</span></p></div><div><p class="ox-4fda187740-ecxMsoNormal"><span style="font-family: 'Calibri',sans-serif; color: black;">A licence is permission issued by a Statutory Authority to authorise the Licensee to perform a specific function.<br>Ofcom is precisely that, H M Government's appointed Broadcast Regulator - and in the case of an RSL issues the BA (Broadcasting Act) Licence at £30 per day and the WTA (Wireless Telegraphy Act) Licence  at £40 per day.</span></p></div></div></div><br><table class="mce-item-table" style="border-top: 1px solid #D3D4DE;"><tbody><tr><td style="width: 55px; padding-top: 13px;"><a href="https://www.avast.com/sig-email?utm_medium=email&utm_source=link&utm_campaign=sig-email&utm_content=emailclient" target="_blank"><img style="width: 46px; height: 29px;" src="https://ipmcdn.avast.com/images/2016/icons/icon-envelope-tick-round-orange_184x116-v1.png" alt="" width="46" height="29"></a></td><td style="width: 470px; padding-top: 12px; 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