Guidance

Youth clubs' exemptions (VAT Notice 701/35)

Find out which supplies made by a youth club or an association of youth clubs are exempt from VAT.

Details

This notice cancels and replaces Notice 701/35 (February 2004).

1. Overview

1.1 What this notice is about

This notice explains:

  • what a youth club or an association of youth clubs is
  • which supplies made by a youth club or an association of youth clubs are exempt from VAT

1.2 Who should read this notice

You should read this notice if you operate a youth club or an association of youth clubs.

1.3 The law covered by this notice

The Value Added Tax Act 1994 section 31 provides that goods and services specified in Schedule 9 to the Act are exempt from VAT.

Schedule 9, Group 6, Item 6 (as amended by Statutory Instrument 1994/2969) specifies when facilities supplied by a youth club or an association of youth clubs are exempt from VAT.

2. Youth clubs and associations of youth clubs

2.1 Youth club

A club is a youth club if it meets all of the following conditions:

  • its members are mainly under 21 years of age
  • it has been established to promote the social, physical, educational or spiritual development of its members
  • it provides a range of activities
  • it has its own constitution
  • it is able to produce its own accounts
  • it cannot and does not distribute any profit
  • it applies any profit made to provide or enhance the service to its members

A youth club must not use any of its income to subsidise any outside activity.

2.2 An association of youth clubs

An association of youth clubs is an organisation, the members of which are youth clubs.

2.3 Youth sections of larger organisations

Youth sections of larger organisations such as a sports clubs, cultural societies and environmental groups are not youth clubs unless they meet the criteria set out in paragraph 2.1.

2.4 Single activity organisations or groups

A single activity club such as a swimming club is not a youth club even if its members are mainly under 21 years of age.

3. Supplies of facilities by a youth club or an association of youth clubs

3.1 Facilities

By ‘facility’ we mean the provision of an amenity or service that enables an activity to be carried out. Examples are given in this table:

Facility Not a facility
A shop Selling items from the shop
Fitness centre Aerobics class
Internet café Surfing the web
Library Hire of videos and DVDs or use of photocopier
Access to student union bar through payments of union subscriptions Purchase of alcohol and food from the bar

3.2 When supplies of ‘facilities’ are exempt from VAT

The following table explains when supplies of ‘facilities’ by a youth club or association of youth clubs are exempt from VAT:

If you are then facilities you supply to are exempt when provided
a youth club (see paragraph 2.1) members in return for their subscriptions or
for an additional payment provided the facilities are directly related to the club’s ordinary activities.
an association of youth clubs (see paragraph 2.2) youth clubs that are members of the association in return for subscriptions, affiliation fees or similar payment.
members of individual youth clubs to a member of a youth club which is part of the association of youth clubs and the facilities are of a type that would be exempt if provided by a youth club.  

3.3 Non-exempt supplies

Supplies of facilities by a youth club or an association of youth clubs are not exempt when either:

  • supplied to non-members
  • not commonly provided by a youth club to its members such as:
    • food and drink sold
    • overnight accommodation similar to the type provided by a hotel
    • purely recreational holidays
    • fund-raising events where tickets are sold to the public, certain fund-raising events are exempt

3.4 Recovering VAT on exempt supplies

If you’re VAT registered you’re normally entitled to deduct the input tax on costs that you incur which relate to taxable supplies you make or intend to make. You cannot normally deduct input tax where the VAT costs you incur relate to your exempt supplies. If your input tax relates to both taxable and exempt supplies, you can normally deduct only the amount of input tax that relates to your taxable supplies. Further information on this is in Notice 706: partial exemption.

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Published 28 June 2011