The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.
This guidance note provides an overview of the main VAT issues that need to be considered by acharity. Charities are often faced with anumber of complex VAT considerations. In particular these will include:
whether they make supplies in the course or furtherance of business
whether the income they receive is consideration for asupply
the VAT liability of the supplies they make
the extent to which they are entitled to recover the VAT they incur on costs
whether they are entitled to charity VAT reliefs on their purchases
Charities are bodies with charitable status. Charitable status does not apply to all non-profit making bodies so it is important not to assume that all non-profit organisations will qualify for VAT relief targeted at charities.
In order to claim charity VAT reliefs, HMRC expects the following conditions to be met:
the charity must be based in the UK, Isle of Man, another EU member state, Iceland, Liechtenstein or Norway
the charity must be established for charitable purposes only
the charity must be registered with the Charity Commission or corresponding regulator, where required
the charity must be run by ‘fit and proper persons’
the charity must be recognised by HMRC (charities can apply for recognition on the GOV.UK website)
Notice 701/1, para 2.1
From 1 April 2012, the definition of charity in FA 2010, Sch 6 has broad effect for the purposes of VAT.
Charities are entitled to conduct trading activities if these are connected with their overall charitable aims
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