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School Trips

School Trips

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School Trips

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  1. School Trips • For school trips in the UK, you can – • (currently) recover VAT incurred • do not need to account for VAT on contributions received • provided: • the trip is educational, and • is paid for from official funds

  2. School Trips and TOMS • If you procure a school trip from a ‘tour operator’ as a ‘package’: • if the ‘tour operator’ uses TOMS ask for the trip to be dealt with outside TOMS in order to get a VAT invoice • but from 1 April 2010 the ‘tour operator’ will have to use TOMS so no VAT will be recoverable • unless • you procure the elements of the trip separately from separate suppliers • or the package comprises wholly the tour operator’s in-house supplies with no bought-in elements

  3. School Trips Abroad • VAT incurred abroad cannot be recovered as input tax • Foreign VAT must be reclaimed from the country in which it was incurred • But foreign VAT will normally only be refunded where: • the VAT was incurred for business purposes • a school in that country would be able to reclaim VAT in similar circumstances • Might as well use UK tour operator and TOMS for trips abroad

  4. School Photographs • Commission income from school photographs must be paid into official funds • Such commission income is, therefore, VATable • If you sell photographs as the agent of the photographer you must account for both output tax and input tax • You will need a VAT invoice to recover the input tax

  5. ‘Classroom Sales’ • ‘Classroom sales’ may be non-business provided the items sold are incidental to the supply of education • Customs require the items to be ‘integral to’ and ‘necessary for’ the education • Broadly: • must be sold in class • must be sold at or below cost • must be appropriate

  6. ‘Classroom Sales’ • No longer need for item to be: • portable • for regular classroom use, ie brought to school on regular basis • Provided ‘integral to’ and necessary for’ test met

  7. School Meals • School meals can be treated as closely related to education (non-business) if: • they are supplied to pupils in receipt of statutory education • they are supplied by the school in its official capacity (including by City Catering) • they are supplied at or below cost • Meals supplied to staff and/or visitors are VATable catering • or possibly zero-rated cold takeaway

  8. External Caterers • School meals can be treated as closely related to education (non-business) provided supplied by the school • School meals supplied by an external caterer can still be non-business provided supplied by the caterer as agent of the school • Contractual arrangements must be carefully structured or non-business treatment may be lost

  9. Other School Catering • Other school catering can also be treated as closely related to education (non-business) provided the criteria are met • This includes • vending machines • tuck shops • catering outlets other than the canteen • etc

  10. Lettings • Sports facilities - standard-rated unless: • over 24 hours - exempt • a ‘block-booking’ to a club or similar - exempt • Car parking - standard-rated • Admissions - standard-rated • Holiday accommodation eg camping facilities - standard-rated • Trading concessions - usually exempt • Advertising hoardings - exempt • Any other lettings - probably exempt • Hire of additional equipment or services - probably standard-rated

  11. Community Education • Statutory education is non-business • Other education provided free of charge is non-business • Other education where a charge is made, eg community education, is exempt • Any other ‘structured instruction’ provided by the Council is exempt • Goods or services supplied incidental to exempt education are also exempt

  12. Purchases with Donated Funds • VAT can be recovered on purchases made with donated funds providing: • the item bought becomes the property of the Council • payment is made out of official funds • a VAT invoice addressed to the Council is obtained • the item is used for Council purposes • If the item is ultimately sold VAT will have to be charged on the sale

  13. Sponsorship • Where a donor receives anything in return for the donation it must be regarded as sponsorship. • A simple acknowledgement of the financial assistance is not usually regarded as sponsorship • Anything more means the income must be treated as standard-rated

  14. School Shows • Admission charges to school shows can be treated as exempt being cultural shows • Associated supplies retain their VAT liability: • programmes are zero-rated • catering is standard-rated • souvenirs are liable the appropriate VAT rate for the item sold

  15. School Minibus Hire • The hire of a minibus is standard-rated • unless • It is hired with driver and seats 10 or more people when it is zero-rated • VAT can be recovered on fuel bought by the Council • But not on fuel bought by a third party hiring the minibus

  16. Use of Facilities • The use of facilities is usually standard-rated but remember letting of rooms is exempt • Catering facilities can be complicated: • where a hirer lets rooms at a school which includes the kitchens the whole let remains exempt • but • where a hirer lets a room plus catering, the catering is standard-rated

  17. Secondments of Staff • Supplies of staff are usually standard-rated unless the recipient pays the staff directly and there is no further consideration to the seconder • but • Supplies of teaching staff to other education establishments can be regarded as an exempt supply of education

  18. Extended Schools • Extended schools activities may be: • delivered by the governing body under Section 27 • or • delivered by the Council • Each raises its own VAT issues

  19. Extended Services Delivered by Governors • If extended services delivered by governors: • all expenditure/income is governors’ not Council’s • therefore • unlikely to be any VAT recovery • Though may not be much VAT incurred

  20. Extended Services Delivered by Council • If extended services delivered by Council: • all expenditure/income is Council’s not governors’ • but • must be accounted for separate from delegated funds • Full VAT recovery • Need to determine correct VAT liability of income generated

  21. Your Responsibilities • Follow the VAT rules • Remember VAT affects both income and expenditure • Consider the VAT implications of decisions made • Refer to the VAT Manual • If unsure, seek advice don’t guess

  22. The VAT & Taxation Advice Office • If in doubt contact: • THE VAT & TAXATION ADVICE OFFICE • Room B2.10, New Walk Centre • Extension: (29)7470 • Direct dialling: 0116-252-7470 • Fax: 0116-255-2443 • Mobile/Text: 07980-339581 • E-Mail: vattax@leicester.gov.uk