Business or non-business?

KEY POINTS

• Commercial characteristics of a business.
• “Always business” and “deemed businesses”.
• Form a charity?
• More than one business.

Imagine the following situation: I have decided to form a limited company that will buy footballs from a wholesale supplier and sell them for half-price (or less) from a small retail outlet that a friend has allowed me to use without any rental charge.

The only condition I impose is that the buyers of the balls must be either unemployed or from a disadvantaged community.

I will fund the losses by giving donations to the company on a regular basis. What are the VAT issues of this arrangement?

The above scenario with a change in the product being promoted features the exact circumstances of a VAT challenge I had to deal with from...