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Post Info TOPIC: vat on cookery courses
buckland10


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vat on cookery courses
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I have a client who runs a cookery school.  She has recently registered for vat but I have a little confusion over which of her services she needs to charge vat on.  Hope you can help. biggrin

She does catering, which I know is standard rated, but what about her daytime and evening cooking lessons?  She also does corporate team building days, are these charged at standard rate too?

Many thanks.

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Shamus


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Hi Eva,

Your client has obviously passed the threshold for VAT registration so ALL services that she offers should be plus VAT. (Catering / Cooking Lessons / Team building days).

This may work against her as adding 17.5% to her charges may price her out of some markets in which case she will need to either withdraw from those markets (which may bring her back under the VAT threshold) or subsume the VAT within her existing charge rate which will effectively reduce your clients income.

Even if she separates the businesses from the revenue's perspective they are likely to bundle the businesses as they are not sufficiently remote.

If she is self employed rather than limited there will be an effect on her mileage allowance if she changes her car so this is something else to be wary of.

Hope that this helps,

Shaun.

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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Wella


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Just to add to Shauns comment, it is the individual that is VAT registered (if a soletrader) therefore running seperate businesses will not remove the VAT liabilities. Assuming this is not a Ltd Co. or Partnership, all goods and services supplied are subject to VAT in this instance.

Bill

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buckland10


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She is a ltd company.  How does that change things?

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Shamus


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Hi Eva,

it doesn't unless we have two separate entities.

If the limited company provides (say) the cookery school and team building days but the evening classes are a hobby done privately then there may be an argument to seperate the two provided that the evening classes are not using the limited company facilities.

Everything done by the limited company will have VAT applied to it. If that includes the evening classes even if just because they use the same premises then such makes it pretty conclusive that they are really the same business and any attempt to separate them would constitute tax avoidance.






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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
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