1) I have a client who is the sole director of a Ltd Co. She lives in Hastings but has to work regularly in London so is paying a friend £250 per mth for lodgings. Can this be included in a dispensation?
2) I have a client who is a director of a Ltd Co. he leases a car for business and private use. I understand that if it is put in the company's name he will incure taxable benefits but my question is can the company claim back interest if it is to be returned in 3 years time (ie not HP)?
3) If a company supplies non vatable services - sports coaching for children but has vatable purchases, stock,printing etc can it be vat registered and can it backdate the refund of vat for 2010-2011 tax year?
(2) If the company enters into a car lease then you'll need to decide whether it is a finance lease or an operating lease, as that will determine the treatment of the lease in the accounts. If it's a finance lease, then any interest recognised in the profit and loss account will be tax deductible. If it's an operating lease, then interest won't be separately recognised - the lease payments will just go through the profit and loss account.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
3) If a company supplies non vatable services - sports coaching for children but has vatable purchases, stock,printing etc can it be vat registered and can it backdate the refund of vat for 2010-2011 tax year?
The general rule has always been that if all of your supplies are exempt for VAT purposes, then you can't reclaim any of the input VAT suffered and so HM Revenue & Customs won't allow you to register for VAT.
You haven't given much information about the company but how sure are you that their activities are not VATable (by which I assume that you mean exempt)? VAT Notice 701/30 talks about sports coaching being a supply of education but, for that to be exempt from VAT, you still need to meet other criteria.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
If you clients supplies are all exempt from VAT then they wouldnt be able to claim back any VAT on the company's expenses/purchases.
If your client supplies a mixture of exempt and VATable supplies then they would be able to claim VAT on costs directly attributable ot the VATable supplies. Would not be able to claim any VAT on costs directly attributable to exempt supplies. Would be able to claim a proportion of VAT on costs that cant be split between exempt and VATable supplies under the Partial Exemption VAT rules. Details can be found on HMRC website how to calculate.
Hi thanks for this and sorry for being so vague! I have looked at the vat notice and now I remember why I didnt pursue it further last year!
My husband and a friend, are both directors of Active Sports Academies Ltd - the company runs sports holiday camps at private schools. The school is paid a % of the takings from parents. The sports are cricket,football,tennis,swimming and keep fit. Does that mean we cannot claim input vat on stationery,clothing for coaches,marketing,promotional goods (trophies etc?).Thanks thanks thanks!!!!
From a look at the VAT notes, the sporting activities may be exempt, but the entity that supplies them must be 'non profit making' to qualify for exemption.
So if your company is a normal trading company with the intention of making a profit then appears you would be able to reclaim VAT on your costs. But you should also be charging VAT on your supplies if you are VAT registered (which is compulsory if your turnover goes over £73k in a tweleve month period or you expect your turnover to be £73k in the next 30 days).
