I’m not normally one to go on training courses – in fact I’m more likely to be presenting one. However, last week I found myself at an Arts & Business Scotland training morning in Scott-Moncrieff‘s Glasgow offices entitled ‘A General Tax Guide for Arts and Heritage Organisations’.
So how did I end up at a tax course?
I’ve recently been working with Alison Turnbull, our Head of Research & Development, on communication around the Museums and Galleries Tax Relief. The UK government delayed the relief, which was due to be have been applied from 1 April this year (see our previous blog for more information) due to the snap election.
While working on the project we’ve been talking to Kirsty Murray, Corporate Tax Director for Scott-Moncrieff. So, I thought I’d go along and see whether Kirsty could help me understand broader tax issues facing arts and heritage organisations.
Who was there?
Apart from myself, Beverley Donaldson from the Scottish Maritime Museum was also representing the museums sector, with other various representatives of predominantly arts and theatre organisations making the audience up to eight. Carl Watt, Head of Programmes for Arts & Business Scotland was there to lead the day, along with Kirsty and her colleague Scott Craig, VAT Partner for Scott-Moncrieff.
What format did the day take?
After general introductions and a little background from Carl on the work they have been doing on tax tips and training with Scott-Moncrieff, we started by hearing from Kirsty on Corporation Tax. We learnt that charities aren’t automatically exempt from taxation, but can benefit from exemptions around their activities. In addition, we heard about some of the risks charities can face around shops, property lettings income and business sponsorship. Finally Kirsty explained the benefits and implications of setting up trading subsidiary companies.
Scott then took over to give us a whistle-stop tour through the key VAT rules and procedures. Covering off the basic principles, registration requirements, liability and recovery of VAT, the session had some particular high points. These ranged from the discussion around catering (you don’t pay it on food, you do on catering; and cold takeaways don’t incur VAT though hot do – you might remember the great Greggs ‘Pastygate’ in 2012!) to the tax implications around benefits given as part of membership schemes (if the benefit is exclusive to members this could be seen as a service provided for the membership fee and therefore might be VATable).
There were a couple of facts I found really interesting. The fact that although most printed materials are VAT free but digital materials are VATable if sold?! Also, printed materials that are ‘incomplete’ (eg. have a form to fill in ) are also VATable: that includes the printing of booking forms, flyers with feedback forms included or even kids’ colouring books!
Gift Aid and Tax Relief
We then covered gift aid and spoke about the two sector tax reliefs that are already in place – theatre and orchestra tax relief. This chat gave me a little more insight into the museums and galleries tax relief, which is being styled round these schemes.
And how was it?
In a word – AWESOME! I came back to the office waxing lyrical about the intricacies of VAT and Corporate Tax! I found the sessions engaging, easy to follow and informative. From being a complete novice I gained a good understanding of the implications of tax for arts and heritage organisations.
I’m not saying that the tax world is simple – in fact the morning highlighted to me the value of consultants like Scott-Moncrieff. However, understanding where there may be issues and what areas to seek advice about proved invaluable.
Of course, most people took the opportunity to get some specific advice from both Kirsty and Scott at the end. Questions like should they charge VAT on tickets or admission (apparently you can be exempt as long as your Board is entirely voluntary) to whether fundraising events are liable.
For further information about tax and the considerations for your business, do check out the brilliant resources on the Arts & Business Scotland website. They also have a dedicated helpline available for member arts and heritage organisations seeking advice.