I know what you’re thinking, surely holiday camps are for the ‘care and protection of children or young people’ and exempt from VAT as ‘welfare’ services. However on close examination by a VAT tribunal, this turned out not to be the case. That’s the thing which many find frustrating about VAT; something which, at face value looks to be non-VATable, can often be found to be the opposite.
The provision of VAT exempt welfare services was the argument put forward by Sports Academies Limited (SAL) when it appeared before the VAT tribunal asserting that it should never have been registered for VAT, and should therefore never have charged VAT on its supplies. After all, argued SAL, there were a number of traders in the market offering services in competition to those supplied by SAL which were not registered for VAT.
SAL was a ‘state-regulated private welfare institution or agency’ regulated by Ofsted on the ‘voluntary childcare register’ and had established a range of camps for 3 to 17 year olds on the premises of 10 schools. The camps operated throughout the school holiday period from 8am to 6pm Monday to Friday as ‘day camps’, providing activities consisting of a variety of games and sports, dance and arts and crafts during the day, according to a structured programme. The camps were subject to a daily charge, but with a price incentive for booking for a week; parents could pay these charges with Child Care Vouchers.
The VAT tribunal noted that being ‘state-registered’ and regulated by Ofsted did not necessarily mean that the holiday camps provided childcare falling within the welfare VAT exemption, Ofsted registration only governed the context in which SAL could operate. Neither did the acceptance of Child Care Vouchers as payment indicate that the services being provided were of ‘care or protection’, as such merely informed that SAL was registered under Ofsted’s register and supplied its services in a context compliant with Ofsted’s regulations.
So, while holiday camps may seem to take some responsibility for the care and protection of children and young people attending these camps, the marketing and advertising materials (and qualifications of staff) are more likely to emphasise sports and activities rather than care. That being the case, parents can expect to be charged VAT while the kids are off at camp having fun; but, then again, maybe the Grandparents are available…
If you would like any more information on this issue please contact David Wilson or your usual RSM contact.