I am registered as a sole trader based in the UK with a taxable turnover beneath our tax threshold, and have two sources of income:
1) Clients, currently all overseas (in the United States), who pay me for my services, and whose payment secures these services
2) Patronage / sponsorship, worldwide
Concerning 2) Patronage / sponsorship, VAT Notice 701/41 suggests that donations or gifts I receive (from UK-based sponsors), "provided they are freely given and secure nothing in return for the donor [...] are outside the scope of VAT" (section 2.2). I can confirm that any sponsorship I receive will be freely given and secure nothing in return.
For sponsors outside the UK, however, section 3.3 merely says "if you make supplies of advertising services and publicity to overseas sponsors, your services may be outside the scope of UK VAT". I can confirm that I do not make supplies of advertising services and publicity to overseas sponsors.
Could I possibly get some confirmation that this is the only condition pertaining to overseas sponsors and, since I do not satisfy the condition, any sponsorship I receive from anywhere in the world is outside the scope of VAT, as per section 2.2?
To give some more context, the means by which I plan to allow people to sponsor me is via buttons on my website, each with a set pledge amount that a sponsor may send monthly or yearly. It is in these buttons that I would be able to include VAT should I need to charge it. The webpage will not contain any promises of anything in return for pledges. Is there enough information here to confirm whether or not I must collect VAT from sponsors?
Concerning 1) Income from clients, I wonder if VAT Notice 701/30: education and vocational training may apply. My current clients all provide educational services for no charge - like me, their services may be funded by sponsors - about which section 1.2 says:
This is not ‘in business’ for VAT purposes (see section 3) and:
* the education provided is outside the scope of VAT
* any closely related goods or services provided, at or below cost, are outside the scope of VAT; and
* the sales of other goods or services are taxed in the normal way
Does this apply to overseas clients or only UK ones? In other words, does this notice confirm that no VAT should be collected by either me or my clients, wherever they are in the world, and that I needn't even go on to consult VAT Notice 741A: place of supply of services to determine any VAT obligations?
If it doesn't apply to overseas clients, could I basically work on the assumption that:
* UK-based clients would not need to be charged VAT
* EU-based clients would need to be charged VAT
* Overseas clients outside the EU often require UK businesses to be a limited company, but may be consulted to determine their local tax law (as in the case of my US-based clients, they don't need me to charge VAT)