Dance Instructor is VAT exempt, but my premises?

YouthBallet

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As a dance instructor I am VAT exempt, and so is any related equipment/clothing sold specifically for our dance academy. However, I will rent a studio space from September which is a certain amount plus (massive) VAT.
Do I pay VAT upfront to the building owner and then request a refund? I am not entitled to be registered for VAT, so how do I get a refund??
 
As a dance instructor I am VAT exempt, and so is any related equipment/clothing sold specifically for our dance academy. However, I will rent a studio space from September which is a certain amount plus (massive) VAT.
Do I pay VAT upfront to the building owner and then request a refund? I am not entitled to be registered for VAT, so how do I get a refund??

No, VAT is a cost to an exempt trader, just as it is a cost to individual consumers.
You benefit at one end, by not having to charge VAT to your customers (since it's unlikely you could pass on the cost of the VAT to your customers, you would have to bear some/all of the cost of the VAT), and you lose out at the other end by not being able to claim the VAT on your inputs.
 
Also are you absolutely sure that you are being charged VAT? A lot of properties wouldn't attract VAT on the rent, although it would be more likely with a commercial rent.
 
As a dance instructor I am VAT exempt, and so is any related equipment/clothing sold specifically for our dance academy. However, I will rent a studio space from September which is a certain amount plus (massive) VAT.
Do I pay VAT upfront to the building owner and then request a refund? I am not entitled to be registered for VAT, so how do I get a refund??

You are not entitled to register in relation to your dance tuition as it's exempt. Remember that this means that you don't have to give 23% of your turnover to the Revenue in the form of VAT. The price is that you can't recover VAT on inputs. I'd imagine that you are better off.

The sale of equipment/clothing is subject to VAT but presuming that you are decided not to register as you are under the turnover limit run the numbers and see if it's worthwhile to register. I'd imagine that it's not.
 
The sale of equipment/clothing is subject to VAT but presuming that you are decided not to register as you are under the turnover limit run the numbers and see if it's worthwhile to register. I'd imagine that it's not.

The great thing about VAT is the exceptions, and the exceptions to the exceptions...! :D

Case in point;
"Because of the nature of ballet teaching and examinations, regarded as vocational training. other dancing schools are taxable. Ballet school not liable on sale of goods incidental to the training (ballet shoes, leotards etc. ) to members of the school."
[broken link removed]
 
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