Some of the Students’ Guild’s biggest societies are set to lose profits on their events next year, due to a change in VAT exemptions enforced by Her Majesty’s Revenue & Customs (HMRC).
Societies will no longer be able to claim on a specific VAT exemption for ‘cultural’ events, meaning that events featuring live performances stand to lose 20% of the profit from their ticket sales. Other events put on by arts, music and drama societies will also now have to pay VAT.
The changes are being made in the wake of a legal battle between Loughborough University’s Students’ Union and HMRC, as Loughborough lost their appeal against the HMRC’s decision to refute their cultural exemption.
Societies can no longer make use of cultural exemption from VAT with immediate effect. However, the Guild’s Finance and Audit Committee – made up of the Sabbatical Officers as well as student and external trustees – have declared that the Guild will pay all VAT that would have been subject to cultural exemption until July this year. This is to factor in societies whose budgets would have been drawn up around the VAT exemption.
Jak Curtis-Rendall, VP Participation and Campuses, said: “The Students’ Guild has made every effort to mitigate the effects of this unexpected change that is completely beyond our control. We have made urgent arrangements to ring-fence the full funding required to ensure that no society will be financially affected for the 2013/14 academic year. Societies will be fully supported by us throughout the change, and they will continue to process all their requests as normal”.
The removal of the exemption is expected to have an impact on a significant number of societies. Last academic year, a total of 35 societies made use of cultural exemption, and 34 have already done so this year, with the majority of them making use of it more than once.
Some of the bigger theatre societies will likely be making hundreds of pounds less on their shows next year. Magda Cassidy, President of Shotgun Theatre, said: “Cultural exemption is a really important factor for us when considering what projects we can take on; with the additional VAT costs I worry that we’ll have to make extensive cuts elsewhere in order to maintain the high standard of performances we have been able to achieve”.
Any enquiries about the changes in VAT exemption, and how it may impact on your society, should be directed to Jak Curtis-Rendall, VP Participation and Campuses.
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