Written Answers. - VAT Payments.

Seán Haughey


512 Mr. Haughey asked the Minister for Finance if a local scouts club which employs a contractor to undertake construction works involving labour and materials is obliged to pay VAT; if this VAT can be recouped; and if he will make a statement on the matter. [1854/99]

A building contractor is required to register and account for VAT if his turnover exceeds the £40,000 goods registration threshold or the services registration threshold of £20,000 in any 12 month per iod. Most construction work is rated for VAT purposes at 12.5 per cent.

As regards the recoupment of any VAT by the scouts club, the position is governed by EU law with which Irish law must comply. Under the EU Sixth VAT Directive, a wide range of groups engaged in voluntary and social activities are deemed to be exempt for VAT purposes. This means that the bodies involved do not charge VAT on any services they provide, but as a necessary corollary, they are unable to recover any of the VAT that they bear on the goods and services, including construction, that they purchase in the course of their activities.