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HMRC internal manual

VAT Trade Unions and Professional Bodies

Trade unions and professional bodies: Representational associations

Item 1(d), Group 9, Schedule 9, VATA 1994

“Item 1(d)” contains three main criteria that have to be satisfied by an association before exemption can be granted:

  • a “primary purpose” to “make representations”;
  • these “representations” being “to the government” and
  • “in the business or professional interests of its members”.

Primary purpose… to make representations

You should apply the same tests to establish the association’s “primary purpose” that are used to establish the “primary purpose” when exemption is claimed under “Item 1(c)”. The key elements or principles to be taken into account are:

  • the objects / objectives set out in the association’s memorandum and articles of association or constitution;
  • the powers and activities of the association.

The procedure is the same as that described in VTUPB5400.

To the government

The “representations” should be to the UK government.

Business or professional interests of its members

The “representations” must relate to legislation or public matters affecting the members’ “business or professional interests”.

Note (5) to Item 1, Group 9, Schedule 9, VATA 1994

“Note (5)” to the exemption group contains a further criterion that an association must satisfy before exemption can be permitted under “Item 1(d)”: namely, that the member individuals and corporate bodies must be restricted “wholly or mainly” to those with professional or business interests “directly connected with the purposes of the association”. Unlike “Items 1(b)” and “1(c)”, members are typically not individuals. Again, you should use 75% as the benchmark for what constitutes “wholly or mainly”.

The members business or professional interests must be directly connected to all the purposes of the association. Furthermore, the rules or its practice should be to restrict eligibility for membership.