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</head><body><p>You're entirely right Phil, but I would just add that often a station can identify something it does 'by way of business' that is within the scope of VAT and permits it to register voluntarily for VAT at an advantageous time (ie when setting up or carrying out a major capital project). </p><p>We did just that 13 years ago before going on air - the business activity that we identified was charging local individuals or groups for use of our studio for recording work - that wasn't a major part of our activity, but it doesn't have to be, and it satisfied HMCE (now HMRC) who quizzed us about it at the time. </p><p>You only have to be carrying out some business that depends on the use of the goods and services you are buying - it doesn't have to be airtime sales, but some part of your business work must be within the scope of VAT - if everything you sell is exempt then you can't register. More info on this at https://www.gov.uk/guidance/vat-exemption-and-partial-exemption</p><p>What you say about charities and VAT is exactly what I said - contrary to a popular misconception, charities cannot reclaim VAT except for some very limited things unless they register for VAT (which again a charity can do if it engages in some business, such as providing paid-for training).</p><p>A key point to remember is that whether or not an organization is constituted 'not-for-profit' or as a charity, it may still in VAT terms engage in business - as I mentioned earlier, VAT legislation defines business as providing goods and service for payment or other consideration, it does not have to mean to be in business for profit. In VAT law business includes carrying on any trade, profession or vocation. </p><p>NB the definition of business includes among other things the provision by an organisation of facilities or advantages available to its members, but of course if you rely on that as your business then you have to charge VAT on members' subs, so it may be best avoided. We offer no special facilities or services exclusive to members so that we don't have to charge VAT on subs.</p><p>Alex</p><blockquote type="cite"><p>On 05 July 2016 at 17:38 Phil Edmonds <lists@philedmonds.info> wrote:<br><br><br>On 04/07/2016 14:05, Bill Best wrote:</p><blockquote type="cite"><p>For stations that do not make charges to customers - for example,<br>stations not carrying advertisements - then it appears that there is<br>even more incentive to register for VAT.</p></blockquote><p>The following is based on my own knowledge on VAT from looking into this <br>in the past (we're talking 10-15 years ago, but I don't think things <br>have changed that much) and of course I am not a qualified accountant.<br><br><br>In a nutshell VAT is a tax on the "end consumer". When you are a VAT <br>registered business you can offset the VAT you paid on goods and <br>services that you have used in the production of your product against <br>the VAT you charge to your customers for your goods or services, thus <br>moving the liability for the tax down the supply chain to the end user.<br><br>If you do not actually sell anything you are not eligible to be VAT <br>registered as in this case you are the "end consumer" and as such you <br>have to pay the VAT.<br><br><br>As for being VAT exempt as a charity, as other have said this is not <br>blanket and having spent the best part of a couple of decades buying <br>things acting for several charities I've certainly paid plenty of VAT!<br><br>"Talking newspapers" for the blind are exempt from VAT, and I recall <br>that back, probably in the early 1990s, if not before, the Hospital <br>Broadcasting Association run a campaign, with no success, to get their <br>member stations who are almost exclusively registered charities to gain <br>VAT exempt status as they provide a "similar" service as talking newspapers.<br><br>It's worth remembering that while Community Radio stations have to be <br>"not for profit", only a small number are registered charities. Hospital <br>radio stations normally have "health" related chartable objects. <br>Community Stations who are charities tend to have "education" related <br>objects. Just "doing radio" is not a charitable activity, but of course <br>"doing radio" can be "non profit" and provide "social gain" etc.<br><br>Phil.<br><br>_______________________________________________<br><br>Reply - cma-l@commedia.org.uk<br><br>The cma-l mailing list is a members' service provided by the Community Media Association - http://www.commedia.org.uk<br>Twitter: http://twitter.com/community_media<br>http://www.facebook.com/CommunityMediaAssociation<br>Canstream Internet Radio & Video: http://www.canstream.co.uk/<br>_______________________________________________<br><br>Mailing list guidelines: http://www.commedia.org.uk/about/cma-email-lists/email-list-guidelines/<br>_______________________________________________<br><br>To unsubscribe or manage your CMA-L mailing list subscription please visit:<br>http://mailman.commedia.org.uk/mailman/listinfo/cma-l</p></blockquote></body></html>