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Tax – VAT

Sports clubs – non-members

HMRC has traditionally taken the view that if a non-profit-making organisation makes supplies that are closely linked to sports or PE then those suppliers will be exempt from VAT, provided the supplies are made to members of that organisation. Thus, in a golfing context, tee fees charged to members are VAT-exempt, but non-members have to pay full VAT.

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VAT recovery – ‘economic’ test

Does the right to recover VAT (the right of ‘deduction’) apply between unconnected businesses?

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VAT – Land and Property Manual

HMRC has published a new VAT Land and Property Manual. But, do not make the mistake of thinking it is a new resource (it simply extracts text from the old VAT Manual) or that it is entirely up-to-date (it is not!).

 

Bad debt – VAT-only invoice

The Court of Session has held that it is not possible to get bad debt relief for the whole of the unpaid VAT on a VAT-only invoice. Relief should be limited, as normal, to the fraction of the unpaid amount equating to the VAT fraction. 

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TOGC – agreement for lease?

The First-Tier Tribunal has held that the transfer of a property that is subject to an agreement for lease can be a TOGC (as a property rental business). 

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Takeover – SPV

Special purpose vehicles (SPVs) are typically companies created for the purposes of a specific transaction (eg to hold an asset in the course of a complex sale). But, there are VAT implications to consider.

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Leases – storage space

In October, self-storage suppliers (eg Yellow Box) were brought within the standard-rate charge for VAT. But, it seems that change has had a wider impact than originally appreciated.

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Land – separate supply

If land is let with other services, then there will usually be a single supply for VAT purposes. For instance, in Purple Parking [2009] it was held that a bus service was ancillary to the predominant airport car parking service, so there was a single supply. 

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Auction – opt to charge VAT?

If commercial property is sold at auction, and there are Ts occupying the property, then the buyer will want to avoid paying VAT by structuring the transaction as a TOGC (at the very least, this will save some SDLT).

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Sublease – TOGC?

It has been held that the grant of a sublease by a property-letting L can amount to TOGC for VAT purposes. Importantly, HMRC has now confirmed that it accepts that position.

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