Tax / vat
How your business is formed has an impact on your liabilities for tax and VAT.
At present charities are not required to submit their accounts to HMRC (Her Majesties Revenue & Customs) annually. Each year a sample of charities are asked to complete a return, the type of which depends on their formation. Should you be requested to submit a return, professional advice should be sought.
Please note:
Even if a charity does not receive a request to complete a Self Assessment return, the onus remains with the charity to notify chargability to tax where all or part of its income and gains are not exempt from tax.
As a private business you will be responsible for producing your annual tax return, this may be via a self assessment form or as a registered company.
Value Added Tax (VAT) is a tax businesses charge when they supply their goods and services in the United Kingdom (UK) or Isle of Man (IOM). The supply of any goods and services which are subject to VAT at any rate, including zero-rated, are called taxable supplies. If the value of your taxable supplies in the past 12 months or less has exceeded the current VAT registration threshold of £60,000 then businesses should generally become VAT registered.
However, Nursery education is regarded as VAT exempt and as this is likely to be the main or only part of your business you will not be able to register. This means that as a pre-school, nursery or out of school club you cannot charge VAT on your fees and cannot claim it back on any expenditure. For further information visit the HM Revenue & customs website and see Notice 701/31.
Links
www.hmrc.gov.uk
The website for Her Majesties Revenue and Customs