Commentary

V6.190 VAT recovery and practical points for clubs and associations

Part V6 Business by business

V6.190 VAT recovery and practical points for clubs and associations

V6.190 VAT recovery and practical points for clubs and associations

If a club or association is in business, registered for VAT and making taxable supplies then it can usually reclaim as input tax any VAT which is charged to it in order to make those supplies, provided that it holds the necessary evidence. This is usually a valid tax invoice, although other documents are also acceptable. For full description of the recovery of input tax see Division V3.4.

Non-deductible input tax

Certain types of expenditure will be excluded from VAT recovery by their nature. For details of input tax which is excluded from credit see V3.440–V3.450. Included within this bracket is VAT on business entertainment (see V3.446) and most cars (see V3.443). It is possible that some clubs and associations will incur VAT on such expenditure.

VAT incurred for non-business activities

Any VAT incurred for the purpose of a club or association's non-business activities is not input tax and cannot be recovered.

Whether a club or association's activities are business or non-business is discussed 'Business/non-business activities for clubs and associations' at V6.189 above.

For discussion of a business purpose in the context of input tax recovery see V3.405A–V3.410. Where a club has a mixture of both taxable business activities and non-business activities, V3.408 discusses the principles of apportionment of VAT incurred on costs.

Partial exemption and the capital goods scheme

As described in V6.189, there may be instances where a club or association makes supplies which are exempt from VAT. In such circumstances the amount of

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