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Are you aware...



 
 
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  #1 (permalink)  
Old December 10th 06, 04:51 PM posted to uk.rec.caravanning
Mary Fisher
external usenet poster
 
Posts: 3,847
Default Are you aware...


"Anne Jackson" wrote in message
...
...that VAT ( at 17.5%) is levied on the poppy wreaths which
are laid at war memorials on Remembrance Day?

I only discovered that fact this year, and to say that I was
extremely upset would be to put it mildly.

So I got in touch with my MP, who has 'done his MP thing' and
has received a reply from Dawn Primarolo as a result, stating
that, basically, there is nothing that can be done about it now,
and the VAT charge will remain....

Well, I told my MP that I was going to make a point of bringing
this fact to the attention of as many people as I could...

This is part of that attempt! I would ask anyone who feels that
this charge should NOT be levied on wreaths, made by a charity, which
in the main are bought by associations which are themselves charitable
institutions, to get in touch with your own MP and voice your concerns.

Thank you.

--
AnneJ


Thank you Anne, I'll do that.

Mary


Ads
  #2 (permalink)  
Old December 10th 06, 06:17 PM posted to uk.rec.caravanning
Remus
external usenet poster
 
Posts: 141
Default Are you aware...


"Anne Jackson" wrote in message
...
...that VAT ( at 17.5%) is levied on the poppy wreaths which
are laid at war memorials on Remembrance Day?


Where did you hear this Anne? I'm happy to write to my MP on the matter but it would help if I could quote a reference.
  #3 (permalink)  
Old December 10th 06, 10:24 PM posted to uk.rec.caravanning
Geoff Lane
external usenet poster
 
Posts: 870
Default Are you aware...

Anne Jackson wrote in
:

Wouldn't it be nice if we could persuade the government to repay all
the VAT charged on poppy wreaths since 1973 (when VAT was introduced)
to the Earl Haig Fund....Not much chance of that happening, though.
8-(


It's a double-edged sword. If I read your post correctly, you're complaint
is that the Haig Fund charges VAT on the wreaths they supply. Is this so?
If it is, then the Haig Fund must be VAT registered and will be able to
reclaim VAT on all their inputs, which they would not be able to do if they
were not VAT registered.

It's swings and roundabouts, but probably works in the Haig Fund's favour.
Because much their funds come from collection tins and gift-aid donations,
their inputs probably exceed their outputs with respect to relevant
supplies and the relatively small amount of VAT they must charge on the
wreaths allows them to recoup much more from HMRC on the inputs.

IOW, if your campaign succeeds, it could cost the Haig Fund more than
they'd save. Presumably, if HMRC repaid all the VAT charged on poppy
wreaths, the Haig Fund would have to repay all the VAT they'd recouped on
the stuff they'd bought.

Please take a close look at the HMRC info on Charities and VAT, which you
can find at http://tinyurl.com/y2acla

HTH,

--
Geoff
  #4 (permalink)  
Old December 11th 06, 08:17 AM posted to uk.rec.caravanning
Nebulous
external usenet poster
 
Posts: 30
Default Are you aware...


"Anne Jackson" wrote in message
...
The message from Geoff Lane contains these
words:
Anne Jackson wrote in
:


Wouldn't it be nice if we could persuade the government to repay all
the VAT charged on poppy wreaths since 1973 (when VAT was introduced)
to the Earl Haig Fund....Not much chance of that happening, though.

It's a double-edged sword. If I read your post correctly, you're
complaint
is that the Haig Fund charges VAT on the wreaths they supply. Is this so?
If it is, then the Haig Fund must be VAT registered and will be able to
reclaim VAT on all their inputs, which they would not be able to do if
they
were not VAT registered.


Charities _cannot_ be VAT registered! They must charge VAT and *pay* VAT
but they cannot register..... The thought being that there are more
advantages to be registered as a charity than mere VAT repayments.



Did you read the link you were given - from the HMRC website? They not only
can be registered, but need to be registered if they supply goods for a
consideration. ie if they make wreaths to sell.

The situation is very complicated however. I work for a charity and we have
had consultants arguing over our options for the last 6 months.



It's swings and roundabouts, but probably works in the Haig Fund's
favour.
Because much their funds come from collection tins and gift-aid
donations,
their inputs probably exceed their outputs with respect to relevant
supplies and the relatively small amount of VAT they must charge on the
wreaths allows them to recoup much more from HMRC on the inputs.


IOW, if your campaign succeeds, it could cost the Haig Fund more than
they'd save. Presumably, if HMRC repaid all the VAT charged on poppy
wreaths, the Haig Fund would have to repay all the VAT they'd recouped on
the stuff they'd bought.


If it succeeds it won't cost the Earl Haig Fund a penny, other than a
member
of staff will not have to be responsible for making VAT payments to HM
Govt!


So are you saying the only saving for them will be part of one person's
wages?

I have all the information I need, from a member of staff in the Earl Haig
Fund office, thank you! ;-)


It could be worth putting your proposal to the board of trustees or
directors or whatever the governing body is called to see if they are happy
to have your support.

You may have a really worthwhile campaign - but you really need the backing
of the board rather than one person in the office to campaign on behalf of a
charity.


Neb


  #5 (permalink)  
Old December 11th 06, 08:32 AM posted to uk.rec.caravanning
Geoff Lane
external usenet poster
 
Posts: 870
Default Are you aware...

Anne Jackson wrote in
:

Charities _cannot_ be VAT registered! They must charge VAT and *pay*
VAT but they cannot register..... The thought being that there are
more advantages to be registered as a charity than mere VAT
repayments.


That's not true. Charities can register for VAT and often must be
registered. Also no-one can charge VAT unless they are registered.

From the HMRC FAQs I linked last post:
--- 8 ---
What are the rules governing charities and VAT registration?

Charities *must register* for VAT purposes when the value of their
taxable business supplies exceeds the VAT registration threshold. The
VAT registration threshold is regularly reviewed and generally increases
each year with the Budget. However, providing you make taxable supplies,
even if their value is below the registration threshold, *you can still
register for VAT voluntarily should you think it might be of benefit to
you*. (my emphasis)
--- 8 ---

So not only can they be VAT registered, the Haig Fund must register if
the value of the wreaths etc. exceeds the VAT threshold. A search of
Companies House reveals that the Earl Haig Fund Scotland is company
number SC194893 and so their accounts will be available to you on payment
of the Companies House fee. That will tell you how much VAT they charged
and reclaimed and if their input tax exceeded their output tax. If so,
your campaign will cost them money if successful.

The 2002 Scottish Executive Consultation on the Review of Scottish
Charity Law (http://www.scotland.gov.uk/Resource/...05/0030651.pdf)
section 6.2 has this to say on the subject:

"Whilst charities do not have general exemption from VAT, there are
certain reliefs in relation to VAT on expenditure. Also charities do not
have to charge VAT on some activities when non-charities do. Where the
activities are wholly non-business, charities, like anyone else, do not
have to register for VAT."

So it would appear that the Earl Haig Fund (on the Scottish Register of
Companies) are not required to register for VAT unless their business-
related outputs exceed the VAT threshold but may register for VAT if they
believe it to be in their financial interest.

Other than poppy wreaths, I don't know what taxable supplies the Earl
Haig Fund makes. If the value of those supplies is below the threshold
(currently about 60,000 pa), it is almost certain that they have
registered because it benefits them financially. For that, they might
have "engineered" things to have the wreaths classed as business supplies
to be able to reclaim input tax. IOW, they might be very carefully
managing their tax affairs and you could be about to put a dirty spanner
into the well-oiled machine of their tax strategy.

Tread carefully, Anne Jackson, and be sure of your facts lest you harm
that which you seek to benefit.

--
Geoff
  #6 (permalink)  
Old December 11th 06, 10:32 AM posted to uk.rec.caravanning
Mary Fisher
external usenet poster
 
Posts: 3,847
Default Are you aware...


"Anne Jackson" wrote in message
...
The message from "Remus" contains these words:
"Anne Jackson" wrote in message
...
...that VAT ( at 17.5%) is levied on the poppy wreaths which
are laid at war memorials on Remembrance Day?


Where did you hear this Anne? I'm happy to write to my MP on
the matter but it would help if I could quote a reference.


Bill is Treasurer of a new Association (Malaya, Brunei and Borneo
Veterans) and ordered several wreaths to lay on Remembrance Day.
I took the opportunity to order a spray (of five 'old-fashioned'
poppies) and was amazed to discover that VAT was added to the bill.

I checked with Bill's colleague, who works for the Earl Haig Poppy
Fund, then contacted my MP. Yesterday I received a letter from
my MP, and a copy of a letter from Dawn Primarolo, stating that
once levied, VAT cannot be rescinded.

Poppy Wreaths are reckoned to be in the same category as wreaths
and sprays laid on graves at a funeral, which is a nonsense!

So, I'm campaigning to have VAT removed....I have received a promise
of a question being tabled in the Lords next week, and a friend has
contacted Prince Charles on his private e-mail address... Gordon Brown
has been informed of our concerns, also Chris Patton, and the Chairman
of the Daily Mail, and the Board of HM Revenue & Customs, so the more
MPs who can be contacted, the better...

Wouldn't it be nice if we could persuade the government to repay all
the VAT charged on poppy wreaths since 1973 (when VAT was introduced)
to the Earl Haig Fund....Not much chance of that happening, though. 8-(


Mr Brown only makes things restrospective if it's in his favour :-(

Mary

--
AnneJ



  #7 (permalink)  
Old December 11th 06, 02:47 PM posted to uk.rec.caravanning
Geoff Lane
external usenet poster
 
Posts: 870
Default Are you aware...

As a vet I hold the Poppy Appeal close enough to my heart to contact those
running the poppy funds to ask their opinion. FWIW, nobody I spoke to at
either Poppy Scotland or the Royal British Legion knew of Anne's campaign.

The accountant at the Earl Haig Fund Poppy Factory confirmed the gist of my
earlier post and gave me his permission to relate that via this forum. They
don't charge VAT on individual poppies, but must charge VAT on the wreaths.
However, they reclaim input VAT on all their supplies, whether for
individual poppies or the wreaths. This means, as I suspected, the input
taxes they recover exceed their output taxes and the Exchequer is
effectively making a donation of the difference. If Anne's campaign results
in making the wreaths VAT-exempt, they will lose that funding.

I've also spoken to the Financial Accountant at the Royal British Legion
(who produce the poppies for England, Wales, and Northern Ireland). Their
situation is generally different because the Legion themselves do not sell
wreaths (although their poppy factory occasionally do) and so they couldn't
fully comment today. They've said they will investigate the situation and
possibly reply directly to this group in due course.

HTH,

--
Geoff
  #8 (permalink)  
Old December 22nd 06, 08:34 AM posted to uk.rec.caravanning
Martin McGowan
external usenet poster
 
Posts: 136
Default Are you aware...

Geoff Lane wrote:
Anne Jackson wrote in
:

Charities _cannot_ be VAT registered! They must charge VAT and *pay*
VAT but they cannot register..... The thought being that there are
more advantages to be registered as a charity than mere VAT
repayments.


That's not true. Charities can register for VAT and often must be
registered. Also no-one can charge VAT unless they are registered.

From the HMRC FAQs I linked last post:
--- 8 ---
What are the rules governing charities and VAT registration?

Charities *must register* for VAT purposes when the value of their
taxable business supplies exceeds the VAT registration threshold. The
VAT registration threshold is regularly reviewed and generally increases
each year with the Budget. However, providing you make taxable supplies,
even if their value is below the registration threshold, *you can still
register for VAT voluntarily should you think it might be of benefit to
you*. (my emphasis)
--- 8 ---
snip

Other than poppy wreaths, I don't know what taxable supplies the Earl
Haig Fund makes. If the value of those supplies is below the threshold
(currently about 60,000 pa), it is almost certain that they have
registered because it benefits them financially. For that, they might
have "engineered" things to have the wreaths classed as business supplies
to be able to reclaim input tax. IOW, they might be very carefully
managing their tax affairs and you could be about to put a dirty spanner
into the well-oiled machine of their tax strategy.

Tread carefully, Anne Jackson, and be sure of your facts lest you harm
that which you seek to benefit.


A company is VAT registered buys in products and claims back the
payments for outgoing VAT from customs and excise, it's only product
it sells is VAT exempt so it makes no charge for VAT. therefore
there is no VAT payable to Customs and excise. I know this is a
simplified example but it gives the picture. it would make no
difference to the Earl haig Fund, except they could increase the
cost to jo public by 10% and give jo public a price cut and give the
EHF an increase in income
Martin McGowan
  #9 (permalink)  
Old December 22nd 06, 11:52 AM posted to uk.rec.caravanning
Geoff Lane
external usenet poster
 
Posts: 870
Default Are you aware...

Martin McGowan wrote in news:lMMih.8574
:

A company is VAT registered buys in products and claims back the
payments for outgoing VAT from customs and excise, it's only product
it sells is VAT exempt so it makes no charge for VAT. therefore
there is no VAT payable to Customs and excise. I know this is a
simplified example but it gives the picture. it would make no
difference to the Earl haig Fund, except they could increase the
cost to jo public by 10% and give jo public a price cut and give the
EHF an increase in income
Martin McGowan


No. You can only recover VAT if you're VAT registered, and you can only be
VAT registered if you make chargeable business supplies.

So, a body which sells nothing or sells only VAT exempt products cannot
recover VAT on its supplies. So if poppy wreaths were VAT exempt, the EHF
would be obliged to deregister for VAT, and so would not be able to recover
VAT on the materials it uses to make poppies, the computing equipment and
stationery it uses to run the factory, etc. Strictly, the EHF can only
reclaim the proportion of input VAT attributable to its non-exempt outputs,
but AIUI HMRC consider it impossible to separate the supplies for making
wreaths from the supplies for making single poppies - and so allow input
VAT recovery on the lot.

IOW the only people who would win if the wreaths were VAT exempt would be
the Exchequer. EHF stand to lose all the VAT they currently recover, and
they would either have to accept the loss or raise the price of the wreaths
even further to offset the loss of input VAT.

--
Geoff
  #10 (permalink)  
Old December 22nd 06, 11:58 PM posted to uk.rec.caravanning
Keith Midgley
external usenet poster
 
Posts: 12
Default Are you aware...

On 22 Dec 2006 11:52:13 GMT, Geoff Lane
wrote:

No. You can only recover VAT if you're VAT registered, and you can only be
VAT registered if you make chargeable business supplies.

So, a body which sells nothing or sells only VAT exempt products cannot
recover VAT on its supplies. So if poppy wreaths were VAT exempt, the EHF
would be obliged to deregister for VAT, and so would not be able to recover
VAT on the materials it uses to make poppies, the computing equipment and
stationery it uses to run the factory, etc. Strictly, the EHF can only
reclaim the proportion of input VAT attributable to its non-exempt outputs,
but AIUI HMRC consider it impossible to separate the supplies for making
wreaths from the supplies for making single poppies - and so allow input
VAT recovery on the lot.

Don't forget that there is a difference between supplies that are "VAT
Exempt" (no recovery of input VAT) and supplies that are "chargeable with
VAT at the Zero Rate" (input VAT can be recovered), which category the
poppy wreaths come under I have no idea.

Keith (made redundant by HMC&E when it still was HMC&E and not HMR&C)
--
Keith Midgley
(my first name works better than carnivorous products in email replies).
 



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