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Business or non-business?

27 November 2012 / Neil Warren
Issue: 4381 / Categories: Comment & Analysis , VAT
Practical examples of when a business or non-business arrangement applies for VAT purposes, from NEIL WARREN


  • 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...

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