Paying TAX on fund raisers !!!

zetorman

Need urgent advice asap !!!
Our GAA club run teenage discos JOINTLY with our local hall committee.....they are registered as a limited company but with charitable status. PROBLEM is their accountant now thinks they should be paying VAT on their gross income at the door from teenage discos. As this is shared with us it looks like we will be taking a hit on our income ????
What do ye think ???

An Citeog

Moved to Tax forum. You're likely to get a better response here than in the GAA forum.

cfarrell

There is no exemption from VAT for charities.

So if it's liable to VAT under normal rules, (gone over the turnover limit) then VAT should be accounted for.

Mr. Incognito

cfarrell wrote: »

There is no exemption from VAT for charities.

So if it's liable to VAT under normal rules, (gone over the turnover limit) then VAT should be accounted for.

oh dear.

charities pay VAT but they do not account for it or charge for it. This is a bit area of confusion for newbies.


There are a range of activities relating to clubs and societies that VAT is not charged on

-membership fees etc.

In relation to live events VAT is not chargeable if there no drink or food at it. This doesn't apply to dances but if it is part of a charitable fundraiser revenue have concessions.

anyway,

if you read the VAT Guide in the stickies there is a heck of a lot of VAT exempt activities this could fall under- i.e promotion of charitable event inter alia a fund raiser for same.

I am actually shocked an accountant would ask you to charge VAT on this- first off you are not VAT registered, in fact a charity cannot VAT register. Secondly you are not oblidged to charge VAT on it and thirdly if there is any doubt it's very easy to pick up a phone and ring the revenue and ask.

cfarrell

Mr. Incognito wrote: »

oh dear.

charities pay VAT but they do not account for it or charge for it. This is a bit area of confusion for newbies.


There are a range of activities relating to clubs and societies that VAT is not charged on

-membership fees etc.

That is because membership fees isn't for a service. Therefore it is exempt from VAT in the normal scheme of things.

Charitable activites isn't VATable in the normal scheme of things as they aren't carrying on an economic activity.

Likewise fund raising activities may not be either.

However when you start running a business as a way of fund raising (in competition with private suppliers) then you are liable to VAT, as there is no general exemption from VAT for charities.

If this GAA club has gone over the registration thresholds then it's likely that they are running a regular business and not just holding once off events.

Have a look here http://www.revenue.ie/en/business/chy10.pdf

Does Value Added Tax (VAT) Apply to Charities?

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Yes, there is no general exemption in respect of Value Added Tax for organisations which have been granted charitable tax exemption. There are, however, specific reliefs from VAT in certain circumstances and, where appropriate, such reliefs may also be availed of by charities (see Part 2 of this leaflet).

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Must a Charity register and account for VAT?

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Charities are not, in the normal course, regarded as supplying goods or services in the course or furtherance of a business and as such are neither obliged nor entitled to register and account for VAT on their income. They are not therefore entitled to a repayment of VAT incurred on their purchases other than in the specific circumstances provided for in Part 2 of this leaflet. Charities carrying on a trade e.g. the sale of publications, operating a restaurant etc. are however obliged to register for VAT in respect of such trading activities subject to the threshold for registration,

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Mr. Incognito

A quick look at the badges of trade test will tell you this is not a trade.

It's a charitable fundraiser on a once off.

No VAT need apply

cfarrell

Mr. Incognito wrote: »

A quick look at the badges of trade test will tell you this is not a trade.

It's a charitable fundraiser on a once off.

Well, that maybe why we have different views on it.

As I read the original post, it reads to me that these are regular discos (weekly or monthly), and not a once off event.

zetorman

Thanks folks for all the help. We hold about 12 to 15 of these teenage discos every year. We generally hold them in the school holiday periods. Some of our committe are really nervous now in case we are "breaking the law". My own view is we ....are a voluntary group holding fund raisers to cover our costs and we have no need to worry about the tax man ??? Hope I am right.