Pub Myth No 478: VAT on Golf Lessons

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
I've just had a client on the phone who owns a golf range (sole trader) and he's heard that if he says that the lessons he gives teaching golf are done in his name rather than that of the golf range that he doesn't need to declare VAT on them.
I explained that as he's self employed his VAT registration will cover all work that he does, regardless of what name it's in, but he's still quite sure that he's right.
I've had a look on the HMRC website but I can only see that sporting activities can be exempt from VAT if you're a not-for-profit organisation.

Does anyone know anything about this?

thanks

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Pub Myth No 478: VAT on Golf Lessons

    In this case, it is the individual that is registered for VAT i.e. (Mr Bloggs trading as Bloggs & Bloggs) and therefore you are correct in advising him that he will need to declare VAT on all the income generated from his business as HE is the business - himself and the business are not separate legal entities as would be the case if he was a corporate entity.

    Suppose (for arguments sake) your client was correct, then what (in effect) could happen is that his golf range could run up turnover just below the VAT threshold, thus avoiding VAT altogether. The balance of his turnover could then be in his sole name, thus also avoiding VAT registration in his own name. This is called tax (or VAT) avoidance. I am fairly certain HM Revenue & Customs would not allow this to happen.

    Kind regards
    Steve

    p.s. I like your subject line!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Pub Myth No 478: VAT on Golf Lessons

    Avoidance or evasion???? Not sure which it is, but one you go to prison for, and the other you don't :lol:

    Claudia

    PS - I like the title too - probably the first time that I have smiled today :cry:

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Pub Myth No 478: VAT on Golf Lessons

    I think it may be evasion. I get mixed up between them both!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Pub Myth No 478: VAT on Golf Lessons

    I think that evasion = prison and avoidance = no prison - but I am more than happy to be corrected :lol:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Pub Myth No 478: VAT on Golf Lessons

    We have a sole trader who teaches martial arts and he gets partial exemption because teaching and all associated costs are exempt and the stuff he sells is standard rated, might that be what he means??

    Annette
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Pub Myth No 478: VAT on Golf Lessons

    That makes sense, I hadn't thought of the teaching element being outside the scope of VAT - it is probably what he means.

    Steve
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Pub Myth No 478: VAT on Golf Lessons

    thanks for your replies & claudia, that must have been a stinker of a day for you if the only laugh you got was courtesy of a tax joke!

    While I see peugeot's point of running each side of the business just under the registration threshold, that's not an option in his case. I think it's far more likely to be the teaching thing, I'm going to have to look into this some more (in my *spare* time...)

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