These organisations, however, do incur VAT in providing courses, but they have a special entitlement to recover VAT in respect of their non-business statutory functions. This does not extend to their business activities which are treated for tax purposes in the same way as commercial providers.
Business, for VAT purposes, includes any activity that is mainly concerned with supplying goods or services for any form of regular payment and on a substantial scale.
This is the case even if the activity is not carried on for profit or is undertaken by an organisation with charitable status. The educational activities of the Snowdonia Centre clearly meet this definition.
There is a competitive marketplace for the provision of courses from a wide variety of providers with alternative modes of delivery. It is therefore important to maintain the exempt business ruling for organisations such as the Snowdonia Centre to ensure a reasonably level playing field in this area.
C R S TALBOT
HM Customs Excise VAT Social Division New King's Beam House 22 Upper Grounds, London SE1