School premises shared use policy

 No VAT is charged for lettings within Norfolk County Council as this is outside the scope, VAT category (T).

Letting to outside bodies when there is no VAT, because the income is exempt, is VAT category (E). 

Use of equipment

If the main purpose of the let is the use of the equipment, then you should charge VAT on the whole value of the let.

A let is only exempt from VAT if the primary purpose is occupation of the premises (or land) rather than the use of facilities it may offer. If the facilities are incidental, such as the use of a blackboard in a classroom, the let will be exempt. 

However if using the facilities is the primary purpose, VAT is chargeable. Therefore VAT should be charged where a room is equipped with computers is used for a word processing class. 

VAT is chargeable on the use of kitchen facilities where this is the primary purpose of the let.

Supplied services

Where services are incidental to the let no VAT should be charged. So VAT should not be charged on the cost of cleaning a room after a let. 

If services additional to the right to occupy the premises are provided, VAT must be charged on the value of these additional services. Examples of such services would be a lecture given by school staff, supplying a buffet or providing a car park attendant.

Admission charges

Where the school charges admission to an event, such as a school play, these charges are subject to VAT. Therefore, if a school wanted to retain £2 per person they should charge £2.40 (the 40p being the VAT at 20%). 

This charging by the school should be distinguished from charging by other organisers for events held at the school. See the section below on When to charge VAT for sporting facilities.

The school can avoid charging VAT by having the event organised by a Parent's Association. If the school lets the premises to the PTA, this let is exempt from VAT as the PTA is charging admission to the public. The PTA will only have to charge VAT on its admission charges if its total income from trading activities exceeds £85,000 (in 2018) per year. 

Trading activities include all income received for the provision of goods or services by the PTA, such as admission to events or funds from jumble sales, etc. They do not include donations.

VAT incurred by the PTA on other costs associated with the event may not be recovered when it is registered for VAT.

When to charge VAT for sporting facilities

Sporting purposes includes all types of physical recreation. For example, letting a hall for a dance counts as a sporting purpose.

Lets for non-sporting events

A let of sporting facilities for non-sporting purposes is exempt from VAT. Examples would be the let of a playing field for a fete or a gymnasium for a political meeting.

Similarly, the let of sporting facilities for a sport, which those facilities were not designed, is exempt. Therefore the let of a sports hall for a dance would be exempt.

However, if disco lights, mirrors etc. were put into the hall, VAT should be charged, as these facilities are designed for a dance.

Lets of general purpose halls

A general purpose hall contains no sports facilities or equipment beyond floor markings. Therefore the hire of a school hall for badminton would be exempt if no equipment were provided. If nets were provided the whole let would be subject to VAT.

Lets for more than 24 consecutive hours

If the let is for more than 24 consecutive hours then do not charge VAT. It's exempt income VAT Category E.

In order to be exempt the let must give continuous and exclusive use to the hirer for more than 24 hours. Thus letting a sports hall every evening for a week would not qualify, as the let is not continuous. 

Letting sports hall jointly to two clubs would not qualify as the let is not exclusive - both clubs should be charged VAT.

Lets in a long series

If the let is part of a long series and meets the conditions below then do not charge VAT. It's exempt income VAT Category E.

In order to qualify as exempt the following conditions must be met:

• The series must be 10 or more periods.  There is no restriction on the length of the periods.  
• Each period must be for playing the same sport and in the same place. A different pitch on the same playing field is acceptable.
• The interval between each period must not be less than one day or no more than two weeks
• There must be evidence in writing of the series of lets. This must include a requirement to pay for the whole series, whether or not the facility is actually used every period. An exchange of letters or an invoice issued in advance of lets would be acceptable as evidence.  A refund would not breach this condition if the facility were not available due to an unforeseen circumstance, such as a flooded football pitch
• The let must be to a school, club or association
• As with a let over 24 hours, the let must be exclusive

Provision of services

If services are incidental, eg floodlights, showers or changing rooms, they are treated as part of the whole let. 

Therefore if the let is subject to VAT so are the services. If the let is exempt so are the services. If separate services are supplied, VAT must be charged on these.

Contact for further information

For further information on VAT contact the Tax Manager, Corporate Finance, County Hall, direct dial 01603 222832 or 223177