Commentary

V7.464 Charities—business and non-business activities

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.464 Charities—business and non-business activities

Part V7 Tax planning | Commentary

V7.464 Charities—business and non-business activities

Two important questions that a charity will need to consider are as follows.

  1.  

    •     Will it need to register for VAT?

  2.  

    •     If registered, how much input tax can it reclaim?

A good starting point to both of the above questions is to be clear about the type of activities being carried on by the charity in question.

The activities of most charities can be divided into two clear divisions:

  1.  

    •     business activities, and

  2.  

    •     non-business activities

The phrase 'business activity' normally indicates that the charity is performing some service or providing goods in return for a consideration

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