Sector summary ― charities

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

Sector summary ― charities

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
imgtext

This guidance note provides a summary of key VAT issues of relevance to the charity sector.

Areas covered include:

  1. an introduction to the sector

  2. the VAT meaning of a charity

  3. business and non-business activities

  4. the link between supply and consideration (including grants, donations and sponsorship)

  5. the VAT liability of a charity’s business supplies

  6. registering for VAT

  7. VAT reliefs for charity expenditure

  8. land and property

  9. the implications of incorrectly claimed VAT relief

  10. VAT recovery — including non-business expenditure, partial exemption and the charity special refund scheme

  11. key case law

Introduction to the sector

Amongst non-VAT specialists there is sometimes, an assumption that charities do not pay VAT or are not really affected by VAT. This assumption is false.

The charity sector faces some of the most complex VAT issues of any part of the economy.

In addition to other considerations, a typical charity will have to make difficult technical decisions about:

  1. whether income is derived from a ‘business’ activity

  2. the

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+

Popular Articles

Definition of a close company

Definition of a close companyThe detailed definition of a close company is set out below, but in summary the rules are targeted at those companies where the owners can manipulate the activities of the company to influence their own tax position. Therefore, broadly speaking, in most cases an

14 Jul 2020 11:24 | Produced by Tolley Read more Read more

Class 1 v Class 1A

Class 1 v Class 1AClass 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met

Read more Read more

Corrections and amendments to the IHT account

Corrections and amendments to the IHT accountThis guidance note explains how to deal with changes to the taxable values in the original inheritance tax account.Why do amendments arise?When the IHT account is first submitted to HMRC, it is based on information available at an early stage of the

14 Jul 2020 11:20 | Produced by Tolley Read more Read more