Subscriptions & VAT

The VAT treatment looks at benefits received in return

If members pay a subscription to obtain or gain entitlement to any substantive benefits of membership then VAT is chargeable on the subscription at the standard rate.

Usually there is one principle benefit for joining and the VAT treatment is determined by the liability of the main benefit. 

However, there is an exception for non-profit making bodies, making a single supply which comprises a mixture of benefits with different VAT liabilities. These bodies may apportion their subscriptions to reflect the value and VAT liability of each individual benefit.

If the whole of the subscription is an entirely voluntary payment and secures nothing (e.g a member of the public could obtain the same benefits) or only nominal benefits in return, then it is all a donation and can be treated as being outside the scope of VAT.

Trade unions professional associations and political, religious, patriotic, philosophical, philanthropic or civic bodies

The supply of benefits to members by these non-profit making organisations may qualify for exemption.

A professional association is a body which restricts its membership wholly or mainly to those who hold or are seeking a recognised qualification from it. Membership of the association must be obligatory, or at least customary, for those pursuing a career in that profession

A learned society is a body whose primary purpose is the advancement of a particular branch of knowledge or the fostering of professional expertise. Its membership must be restricted wholly or mainly to those whose employment is, or has been, directly connected with its aims.

Supplies made to members of the above types of bodies in return for their subscriptions are exempt except for:-

• Supplies that are not in line with the aims of the organisation.
• Any supplies that are payable on top of the subscription fee.