Many clubs offer members a range of services for their membership fee. For example, membership may include a members’ magazine. Ordinarily, a magazine subscription should be zero rated for VAT purposes, but when the magazine element is bundled into a general club subscription – that is standard rated for VAT – problems can arise.
HMRC is prone to view the “bundled” price as a standard rated supply, whereas the affected organisation would prefer to separate out the zero-rated element thus reducing the cost to their members.
In a recent case, the Harley Owners Group challenged such a fixed supply argument raised by HMRC. They argued that the members’ magazine was a separate supply and should be considered zero-rated, and the courts agreed.
The delivery of mixed services under an umbrella membership subscription is an area of VAT law that is far from clear. However, HMRC has lost a number of cases recently with a similar outcome to the Harley Owners Club.
- Employment of someone to work in your home - January 27, 2022
- Are you eligible for local authority grants? - January 25, 2022
- Self-employed tax twisters - January 19, 2022
- Landlords and tax – the basics - January 18, 2022
- More time to file tax returns and pay tax due - January 13, 2022
- Are you registered to use MTD for VAT? - January 11, 2022
- Don\’t forget to declare COVID-19 grants - January 6, 2022
- Will your earnings exceed any of these amounts in 2021-22? - January 5, 2022