VAT for Charities - Latest Guidance

Introduction

VAT is an enormous burden on this sector. Charities are generally subject to the same VAT rules as any other organisations, but suffer from a restriction on VAT recovery due to their 'non-business' activities and also (usually) partially exempt status. There are also, however, a number of VAT reliefs and exemptions available specifically for charities, subject to certain conditions and restrictions. Some charities can recover VAT on costs attributable to their ‘non business’ activities even if they are not VAT registered. Many such bodies have failed to realise this!

In addition, in June 2022, HMRC changed their guidance on what they mean by ‘non-business’. This concept must be reviewed, and VAT outcomes altered where necessary.

This in-person session provides clarity on how charities should arrange their affairs to take the most advantage of these VAT reliefs, optimise VAT recovery, and avoid costly pitfalls, particularly on high value projects.

This session assumes a good knowledge of VAT generally, and is intended for charities, and those advising charities i.e. anyone who needs a thorough understanding of VAT in this sector.

What You Will Learn

This interactive session will cover the following:

• The EU background and charity VAT law
• The distinction between business and 'non business' activities and the VAT effect. HMRC’s guidance from 2022
• The often overlooked 2015 Budget changes which widened the scope for VAT recovery
• Supplies - Getting the VAT liability right on various income streams
• VAT and charity fundraising
• True grants, donations and legacies
• Admission charges and donations in lieu
• Charity shops
• Exemptions for cultural and sporting activities
• The exemptions for health, welfare and education
• Affinity credit cards
• Supplies of staff
• Land and property
• Zero rate for construction of relevant residential and relevant charitable buildings
• The VAT option to tax - what it covers and what it does not
• Disapplying the option to tax on relevant charitable buildings
• The VAT Capital Goods Scheme
• Cross-border supplies
• A review of the rules for goods and services
• The reverse charge-wider application since the Wellcome Trust case?
• VAT on Costs
• VAT reliefs on charitable expenditure, e.g. advertising
• The 5% reduced rate
• Claiming the right amount of input tax
• Correct invoice evidence
• Blocked input tax
• Direct attribution
• Business: non-business apportionment- how does that work?
• Partial exemption - the standard and special methods