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Developing a sports club - VAT issues

  • 20-04-2010 10:28am
    #1
    andiknowyou
    Closed Accounts Posts: 14 ✭


    Could anyone help me on this matter. Our club is looking to make significant investment in its facilities, and being able to claim VAT back on expenses incurred could save us up to 50k on the costs. However, when the development is done, we would hope to make profits on the letting of our facilities and so by setting up a company, while we would save the VAT, we would incur Corporation Tax on any profits made in the future.

    Is there any tax efficient way to do this. We have looked into registering as a charity but as of yet I do not have sufficient information to persue this.

    Any help would be appreciated.


Comments

  • #2
    dbran
    Registered Users, Registered Users 2 Posts: 2,094 ✭✭✭dbran


    Hi

    Are you a business that intends to trade to make profits or are you a club that just operates for the benefit of its members?

    If your only source of income is members subscriptions then you are deemed to be trading with yourself and the income is not taxable for CT or income tax purposes. But you cant register for VAT because you are not carrying out any trading activity.

    From the information that you have given I do not think you will be eligable to register for a charity as you dont appear to carry out any charitable activities.

    ie 1 Trusts for the Relief of Poverty
    2 Trusts for the Advancement of Education
    3 Trusts for the Advancement of Religion
    4 Trusts for other purposes beneficial to the community

    Besides, charities cant register for VAT either unless there is a trading element to their activities. In that case they can only register for that proportion of their activities that is for trade.

    Hope this helps


    dbran


  • #3
    andiknowyou
    Closed Accounts Posts: 14 ✭andiknowyou


    Our only sources of income are from subscriptions and various fundraisers during the year. However, post development, we would have a couple of astro turf pitches that would generate profits. These profits would be put back into the club for its general running. So reclaiming the VAT element of the development while avoiding income taxes down the line is what we are trying to do. Probably not possible however.


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