Is VAT reclaimable for private care/education provider

patg

I have seen Revenue information advising public bodies (schools etc) can account for VAT; but are not entitled to reclaim input VAT.

Does anyone know what the situation would be for a private limited - not for profit - company providing care education services?

There is no VAT chargeable, and noted the business is not required to register for VAT.

Can it voluntarily register and reclaim input VAT incurred?

Thanks and regards

dbran

Such services are exempt from VAT so you cannot voluntarily register and claim back the VAT.

Also you have to be carrying out a business in the state to be entitled to register for VAT and you say you are a "not for profit" entity.

dbran

Maidhci

dbran wrote: »

Also you have to be carrying out a business in the state to be entitled to register for VAT and you say you are a "not for profit" entity.

dbran

Not-for-profit entities, usually registered as companies limited by guarantee, can carry on a business and are therefore entitled to register for VAT, similar to any other business entity. It is the nature of the business being conducted not the status of the entity that determines eligibility and / or obligation to register for VAT.

I would need more information on the nature of the services provided to answer the original question posed by patg.

patg

Thanks both above for your input.
As Maidhci surmised - this is a company limited by guarantee.

What is the definition of carrying on a business?
This entity provides care, support, education and medical assistance.

I know the stock answer is consult a suitably qualified accountant on a professional basis, however I am keen to see what general opinion there may be before engaging expensive advice - also would wonder why the step was never taken/advised before as an attempt to reduce expenditure...

From my basic understanding of eligibility to voluntarily register for VAT: - established traders whose turnover from the supply of taxable goods or services does not exceed the thresholds...
That's just about any business?

Any further thoughts?

Alan Shore

Ok so you have two issues:

1. You are a non for profit business, do you charge a fee for the services you provide. A company involved in charitable activities will not charge a fee or will only charge a nominal amount for use of its services. Therefore its not considered to be carrying on a trade for the purposes of VAT.

2. The specific activities that you refer are in my view exempt from VAT, I don't know who the market for your care, support, education and medical assistance is but in general these would be exempt from VAT ie you can not register even if you were an ordinary for profit company.

I work for a charity and we are not entitled to register for our main activities but we have an online shop and as the trade of the online shop are taxable activities we charge VAT on the sales and recover VAT on the purchases related to the shop but not the charitable activities as they are exempt.

patg

Alan Shore - Maybe you have provided my answer.
1) Its debatable whether we charge a fee - we issue invoices but essentially are funded.
Perhaps this means we are not carrying on a trade for the purposes of VAT...
This then presumably excludes us from the voluntary option to register. - Your last comment about the charity you work for would suggest so.

2) The service is provided to children, a comparable example might be whether schools could register for VAT and claim back VAT expended.

Maidhci

As I stated in my earlier post, I would need more information on the basis and nature of the services provided to answer the original question - this is borne out by your last post, wherein you state "Its debatable whether we charge a fee - we issue invoices but essentially are funded." Do you mean that you have a service level agreement with an agency such as HSE or other Govt. Department and that you issue invoices for funds draw down etc etc.? It is not appropriate to give professional advice here and in any event, the information provided is too general etc.