School PTA/charity - tax/Vat info requested

[TooLateForAName]

I've been asked to take over the school PTA which is a registered charity. Very small village school and last year the PTA income was under £10,000.

I'm interested in any info anyone has with regard to the tax treatment of fund raising activity.

The PTA raises money which is then given to the school to fund things like transport/trips/special equipment, etc.

The main fundraising mechanism so far is an annual fair. I'm not sure at the moment how the finance side of this works - different people run stalls and the money goes to the PTA at the end.

Should we be asking people to set up giftaid when passing this money on?

When we give money to the school should we just give the money or should we buy things and give the items (in which case VAT registration?)?

thanks

Interested in what others do in this sort of situation, hints/tips/guides/etc....

[Eric Mc]

TooLateForAName said:

I've been asked to take over the school PTA which is a registered charity. Very small village school and last year the PTA income was under £10,000.

I'm interested in any info anyone has with regard to the tax treatment of fund raising activity.

The PTA raises money which is then given to the school to fund things like transport/trips/special equipment, etc.

The main fundraising mechanism so far is an annual fair. I'm not sure at the moment how the finance side of this works - different people run stalls and the money goes to the PTA at the end.

Should we be asking people to set up giftaid when passing this money on?

When we give money to the school should we just give the money or should we buy things and give the items (in which case VAT registration?)?

thanks

Interested in what others do in this sort of situation, hints/tips/guides/etc....

I'll start with VAT. There is no need to register for VAT if the gross takings during the year are below £73,000.

As the PTA is a registered charity, there is no reason why it cannot ask donations and gifts to the charity to be "Gift Aided". However, you need to be careful as to how you define "gifts". Payments received for goods or services supplied by a charity canot be classified as gifts so will not be eligible to be "Gift Aided".

As a charity, it will not pay Income Tax or Corporation Tax on its profits.

If it employs people, it may need to register as an employer for PAYE purposes.

If it buys goods and services or stock for reslae, it can request that the seller NOT charge VAT on the supply as long as the use the charity has for the goods or services applied is directly related to the charitable activity the charity undertakes.
In the case of a PTA, I do not think that there is much that they could get VAT free in this way, to be honest.

[TooLateForAName]

Thanks Eric,

If stallholders at a fair give their profits to the charity, could that be giftaided?

I was just thinking that we could potentially increase income substantially just by asking for giftaid.

cheers

Mark

[Eric Mc]

TooLateForAName said:

Thanks Eric,

If stallholders at a fair give their profits to the charity, could that be giftaided?

I was just thinking that we could potentially increase income substantially just by asking for giftaid.

cheers

Mark

It depends on what basis the stall holders are operating.

If they are completely independent "traders" and they chose to give away the surplus they have made on the day to the PTA, that is their decision as it is their money and they are free to do what they like with it.
If they want to Gift Aid their donation of the profit, they are perfectly free to do so.

They should be aware that if they are operating a stall for their own personal profit, then they would be deemed to be "trading" and should be returning the profit to HMRC as part of a self asessment tax return.

On the other hand, if it is expected that all profits on each stall are to be handed over to the PTA - which I expect is the real situation - then it was never their money in the first place so it is not their's to donate - whether with or without a Gift Aid declaration.

[TooLateForAName]

Eric Mc said:

On the other hand, if it is expected that all profits on each stall are to be handed over to the PTA - which I expect is the real situation - then it was never their money in the first place so it is not their's to donate - whether with or without a Gift Aid declaration.

Curses!

But thanks for the clarification.

[Eric Mc]

Pure logic - when you think about it.