I am an AAT student, 2 exams away from completing level 3 and have volunteered to become the Treasurer for the PTA.
I attended my first meeting last night and some parents raised the question as to whether it would be worth becoming VAT registered in order to reclaim VAT?. I'm not sure how this would work?
I've had a look at the HMRC website but I'm a little confused - am I right in thinking that they can only register for VAT if they are making taxable supplies?
If the PTA are registered with the charity commission and are recognised by HMRC, and they have proof of this a supplier can produce a zero rated invoice, therefore not charging the VAT in the first place?
The PTA are hoping to host a large charity ball next year and trying to investigate ways of keeping down costs, reclaiming VAT being one of them.
Going to need a bit of hand holding taking on this role but hoping its going to be good for experience!
Hi Sara
How is your AAT course going? Have you done the ITAX module as yet or is that one to come? This is certainly a good question to help cement that knowledge, although sounds like you have now met with the joys of going round and round in circles with the HMRC website.
Should be good experience you doing some work for the PTA - but beware comments from the people who (like some sole traders) talk to their mates down the pub about tax and the like and then think that it can be done, whereas often in reality their mate down the pub is breaking all the rules and HMRC will get them one day!
Yes you are correct about an organisation/business having to make taxable supplies to register for VAT. Taxable means standard, reduced or zero rated. If they are just making exempt supplies they cannot register.
Like your thinking on the suppliers zero rating their supplies to the PTA upon the proof you have suggested, BUT - those supplies are very much restricted. Have a look at at the list in section 6 in this VAt guide....
With regards to the charity ball, there are ways of keeping the event well away from VAT, but depends on how you go about it - eg use school premises (free), get in outside caterers - choose the smaller but recommended local businesses as they could well be below the VAT threshold. Naturally if you hire a venue such as hotel or the like then they will charge VAT and that will generally hike up the costs.
Hope that helps.
Feel free to ask as many questions as you need.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you for taking the time to reply. I have completed and passed my ITAX unit, just spreadsheets, (Wednesday!) and Costs and Revenues to go!!
I am hoping this role will give me the experience I am in need of. My last role involved some accounts work, I have been at home looking after my twins for the past 5 years and using the time to try and gain some qualifications but need some real-life experience now.
