When showing someone round last night, they suggested some non-profits are VAT exempt?
And if we do decide to VAT register, I assume we’d no longer pay VAT on group purchases, at least those directly for use in the space?
This has been looked into. We would not be exempt, not without significant changes to our model.
Yes, you are right we could claim back vat, but our outgoings in terms of VAT at the moment don’t come close to cover our income. We would also need to completely overhaul our procurement process
Thanks for the prompt and informative response.
Could outgoings include group/bulk buying? Eg. The clear non-toxic epoxy purchase I’ve arranged.
Also, what’s a rough outline of potential routes to expansion?
Finally, in hindsight, would this be something that could be more easily ‘built-in’ to a new maker-type space?
The simplest way to avoid VAT is to set a membership fee low – say £5 – and encourage donations on top of that amount. LHS used this method…
There must be no difference in member benefit for those donating extra
The very real risk is that a lot of members might just pay the minimum amount…
We couldn’t claim back VAT on group buys, only on direct costs of the Makerspace
And…back to the Pocket NC v2 topic…
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Sure but it might have saved us £700 had it been an option?
But pay out 20% VAT on all our income!
But cost Makerspace 19k . There is method to our VAT madness and the sums have been done. We are however working on a solution as this will be key to expanding the space.
Oh yes, heaven help us for having to pay the government for imports. 
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This is confusing. I’m now under the impression that expansion is seen as undesirable for good reasons.
@moderators this needs forking.
As I suggested over the page, I’m (but possibly not all directors) mostly talking about expansion in terms of square feet, but there IS a complicated relationship between income and rent. that does mean increasing income either through more members, or increasing fees. This is why I suggest elsewhere that the future lies probably in a compromise between two extremes (which will need the tax situtation sorting, either way)
Like death, taxes are pretty hard to avoid…
Even if we were a charity it’s still likely be that membership subscriptions would be subject to VAT once we went over the VAT threshold, as there are clearly benefits given to those paying the subs…
The only not-for-profits I know of that are VAT exempt are sports related groups…they have a special designation
But I’m not suggesting we we try to argue that making is a sport…
I honestly think that for the sake of savings £700 (?) It doesn’t really worth it to invest so much energy to try to avoid taxes , which , if goes wrong , could lead to more trouble .
Imho the space is doing great , I don’t really understand this agitation around "let’s change everything , let’s make it now " who is been around recently .
We are doing great , relax , pleople.
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This one.
Interesting. Not sure why sports should be exempt? How about arts and churches?
It was only a thought, suggestion, discussion. I’m new to these things.
I had thought there might be advantages to VAT registration. I accept that in this case, there aren’t.
And as I’ve said several times already I’m perfectly happy with the status quo. I was merely thinking of others less fortunate than us lucky few. Although I now realise there’s a few other options with more to come.
I know I am a bit late but the VAT exempt, zero rated and reduced rate items are specified in schedules of VAT act 1994. Everything else is standard rated. I don’t think there is any more to the logic of what is VATable