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Complicated choristers

23 February 2009
Issue: 4195 / Categories: Forum & Feedback , VAT
A 'counterintuitive and complex' VAT issue

I read the Readers’ Forum material on Charitable Choristers with interest.

My experience with a major choral society is the same as your contributors’: i.e. HMRC accept that ITA 2007 s 414 applies so singing members’ subscriptions to choral societies are in principle eligible for gift aid.

What makes this result particularly counterintuitive and complex is the fact that they are still liable to VAT at the standard rate.

The subscription is consideration for the rights of membership with the result that the choir has made a supply of services under VATA 1994 s 5.

One cannot require people to pay under gift aid with the result that the liability to pay subscriptions has to be the net amount and not the amount grossed up for the purposes of the income tax acts.

Thus the following factors should be taken...

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