Anyway not to pay UK vat on Course

dozy doctor

Hi,

I am about to sign up for a course in the UK and it only takes 7 weeks...
However for the 7 week period, the course is £9,878 ex vat and with vat is £11,820, which means that the vat payable is £1,942...

I can of begrudge paying the initial course fee as I am unemployed, but if it means that I will get work from it then bring it on...

Does anyone know if there is any way that i do not have to pay VAT?

What if I asked a friend of mine who is self employed to pay the course fee for me and pay by company cheque, is that allowed or would that completely feck things up for him. ie him having to explain where the cash
came from etc.....

Not really sure if i should ask him as i dont want to pressure him in to doing this for me... Just an awful lot of money on my side that i don't really have to lose....

Any help is appreciated as I am looking to book this course in the next day or so....

Many thanks in Advance....

(Mods please feel free to move to another segment if i have posted it in the wrong one)

Alan Shore

dozy doctor wrote: »

What if I asked a friend of mine who is self employed to pay the course fee for me and pay by company cheque, is that allowed or would that completely feck things up for him. ie him having to explain where the cash
came from etc.....

Think you have answered your own question!

dozy doctor

Alan Shore wrote: »

Think you have answered your own question!

so it would feck things up for him and I should not ask him to do this.... Is that correct?

barneystinson

dozy doctor wrote: »

(Mods please feel free to move to another segment if i have posted it in the wrong one)

Yeah Mods, move this to the Fraudulent Tax Evasion forum... :rolleyes:

Surely if you need to ask the question you know the answer OP.

srsly78

Set up your own company and expense your training through that, totally legit. If you want to reclaim the VAT you have to be VAT regd tho, not sure if you can do this on a whim or you have to have significant amounts of sales. Oh, and the training should be business related ofc!

The_Bot

On the face of it, for this proposal to have no immediate cost to your friend, I would imagine that your friend would end up taking a VAT input credit for the VAT you have not suffered. This should be the case even where the UK course provider applies 0% VAT as a cross border business-to-business supply, where the recipient of the supply would generally self-account for the VAT.

Assuming that this is the case, and based on your description of what the VAT relates to, I can't see how he would be entitled to such an input credit and, on a basic level, would therefore not be in compliance with his VAT obligations.

If uncovered in a Revenue audit, your friend can expect to repay the VAT incorrectly claimed plus interest and (potentially) penalties. Messing around like this would also make your friend look very bad in front of a Revenue auditor.

Basically, your proposal means that your friend will most likely be taking on a tax risk just to save you some cash.

dozy doctor

The_Bot wrote: »

On the face of it, for this proposal to have no immediate cost to your friend, I would imagine that your friend would end up taking a VAT input credit for the VAT you have not suffered. This should be the case even where the UK course provider applies 0% VAT as a cross border business-to-business supply, where the recipient of the supply would generally self-account for the VAT.

Assuming that this is the case, and based on your description of what the VAT relates to, I can't see how he would be entitled to such an input credit and, on a basic level, would therefore not be in compliance with his VAT obligations.

If uncovered in a Revenue audit, your friend can expect to repay the VAT incorrectly claimed plus interest and (potentially) penalties. Messing around like this would also make your friend look very bad in front of a Revenue auditor.

Basically, your proposal means that your friend will most likely be taking on a tax risk just to save you some cash.

Thanks for that...I have made the decision NOT to approach him and suck it up and pay the vat.... Crazy that there is VAT payable on Education in the UK... Never mind and thanks to everyone for their feedback

dogsears

srsly78 wrote: »

Set up your own company and expense your training through that, totally legit. If you want to reclaim the VAT you have to be VAT regd tho, not sure if you can do this on a whim or you have to have significant amounts of sales. Oh, and the training should be business related ofc!

Of course you can't register for VAT on a whim, then reclaim VAT paid, and have it all be totally legit.

This is poor advice. VAT registrations are given out by Revenue only when they are satisfied there is a justification i.e. a business is likely to make sales over the threshold, for instance.

srsly78

Would you care to back that up? From what I have read people can voluntarily register for VAT. The threshold is for mandatory registration, it is not a minimum amount.

http://www.revenue.ie/en/tax/vat/registration/

"A taxable person established in the State is not required to register for VAT if his or her turnover does not reach the appropriate threshold above. However, they may opt to register for VAT."

Opt to register? Does that mean on a whim? Does the Revenue website contain poor advice?

Heaven forbid people would set up a company to advance some kind of personal enterprise.

barneystinson

srsly78 wrote: »

Would you care to back that up? From what I have read people can voluntarily register for VAT. The threshold is for mandatory registration, it is not a minimum amount.

http://www.revenue.ie/en/tax/vat/registration/

"A taxable person established in the State is not required to register for VAT if his or her turnover does not reach the appropriate threshold above. However, they may opt to register for VAT."

Opt to register? Does that mean on a whim? Does the Revenue website contain poor advice?

Heaven forbid people would set up a company to advance some kind of personal enterprise.

Read it again.

A "taxable person... may opt to register".

So no it's not a whim - you must be a taxable person to register, so that requires at a minimum an intention to make taxable supplies.

If you try to register for VAT and state that the reason is to get a zero rate on a training course in the UK, Revenue will (or will be within their rights to) tell you to p1ss off. You must link the registration to an intention to make supplies.

srsly78

Ok, but the threshold does not have to be met. Exactly how much sales would have to be generated? Not very much at all. Lots of professionals run their affairs through companies, and expensing education is not controversial.

dogsears

srsly78 wrote: »

Ok, but the threshold does not have to be met. Exactly how much sales would have to be generated? Not very much at all. Lots of professionals run their affairs through companies, and expensing education is not controversial.

The company would still need to be a "taxable person". The threshold does not have to be met, that is true, but that doesn't mean anyone can register for VAT whenever they want. Lots of professionals do run their affairs through companies, but the key to their VAT registration if they have one is that they are running their actual businesses through companies i.e. making taxable (i.e VATable) supplies (or at least intending to).

The Revenue realise that when they issue a VAT registration, they create an Exchequer risk i.e. that VAT suffered may be reclaimed, and where it exceeds VAT charged on sales, repaid. As such they don't issue these numbers willy-nilly, they hand them out like you're winning a prize.

srsly78

Surely to setup a company in the first place you have to declare some kind of intent to make money? Is that not in the memorandum of association?

I'm just playing devil's advocate here btw, there are some interesting questions raised. What about charities? Can they can be vat regd? Without intention to make profit?

dogsears

srsly78 wrote: »

Surely to setup a company in the first place you have to declare some kind of intent to make money? Is that not in the memorandum of association?

I'm just playing devil's advocate here btw, there are some interesting questions raised. What about charities? Can they can be vat regd? Without intention to make profit?

The objects clause in the memorandum of association will set out the main purposes for which the company is formed but that is not enough to get a VAT registration, otherwise it would be as easy as you said, and it isn't.

I have seen the Revenue ask for evidence of intent to make taxable supplies before they would issue a VAT registration, and when a business is right at the very beginning, that isn't all that easy. In that case they were satisfied on the basis of correspondence with a letting agency for premises to trade out of, with potential suppliers over terms, advertising for staff and placing of orders with printers re promo material etc.

srsly78

My personal experience with vat registration differs from that. I just registered and got my vat number for my brand new company without any sales. The only information they had about the company was from the boilerplate articles of association and the NACE code (IT). There was no extra "correspondence", I just filled out the standard form. A few days later I got the VAT cert in the post (which is now lost I think haha).

Seve OB

Can I jump on this thread a little.

So you can register for VAT even if your sales are below the threshold.

What if you register for VAT, then realise your sales will be below the threshold... can you choose not to submit VAT returns or are you obliged to file? . . . I am involved in a position like this at the moment so would appreciate advice thanks.


as for registering for VAT... as far as I was aware, you don't actually have to go to all the rouble of setting up a Company to register for VAT... A sole trader can register for VAT can't they...

srsly78

Yes a sole trader can also register.

Once you are registered you must operate vat, you can't apply it selectively. If you are below the threshold and want to stop you can apply to deregister I think.