VAT

Update: Temporary changes to the VAT payments due between 20 March 2020 and 30 June 2020 have been announced to help businesses manage their cash flow as a result of the Coronavirus outbreak.

Value Added Tax (VAT), as contrasted with direct tax considerations, looks at whether an activity is ‘business’ or ‘economic activity’. ‘Business’ has a different definition from ‘trading’ for direct tax, and an activity could still be considered ‘business’ for VAT purposes but not be a ‘trading activity’ for direct tax purposes.

The main reason why there are so many differences between VAT and direct tax is that VAT is a European tax and the UK has to comply with European Union law in respect of it. When VAT was enshrined in UK law, certain derogations were allowed by Brussels, the most important of which for charities is the zero rate. Without this derogation, the minimum VAT rate that would apply would be 5 per cent. The standard rate of VAT in the UK is currently 20 per cent.

HMRC VAT Notice 701/1 explains how VAT affects charities, how a charity’s income is treated for VAT purposes and what VAT reliefs a charity can obtain on its purchases.

CTG maintains a comprehensive list of recent and ongoing VAT cases relevant to charities.

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VAT

Update: Temporary changes to the VAT payments due between 20 March 2020 and 30 June 2020 have been announced to help businesses manage their cash flow as a result of the Coronavirus outbreak.

Get email updates on VAT

This content is available to our members

Latest on VAT

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Coronavirus information hub for charity tax and finance professionals

Digital links requirements for Making Tax Digital for VAT postponed until April 2021

Deferral of VAT payments due to the coronavirus crisis

VAT on Care Services provided by bodies other than Charities

Tax updates

HMRC updates guidance on the VAT Tour Operators Margin Scheme (TOMS)

VAT zero rating of transport of disabled passengers

New VAT guidance on mixed sponsorship and donations including use of charity name and charity of the year arrangements

HMRC updates Sponsorship VAT Notice

Events

Commentary

VAT on Care Services provided by bodies other than Charities

Reduced rate of VAT for charities on supplies of fuel and power

Marlow Rowing Club – Re-visited

CJEU decision on the University of Cambridge case on VAT and investment management fees

News

Coronavirus information hub for charity tax and finance professionals

Digital links requirements for Making Tax Digital for VAT postponed until April 2021

Deferral of VAT payments due to the coronavirus crisis

CTG calls on the Chancellor to provide immediate support for charities through the tax system during the COVID-19 pandemic

Consultations

Draft legislation: The Value Added Tax (Refund of Tax) Order 2019

Call for evidence on simplification of VAT Partial Exemption and the Capital Goods Scheme

Consultation on restricting the Employment Allowance – CTG response

Making Tax Digital: Data requested on activities of volunteer fundraising branches

Press releases

CTG welcomes the publication of the Charity Tax Commission report

Charity Tax Group responds to Autumn Budget 2017

CTG secures charity exemption to 45% tax on restitution interest

CTG responds to Budget 2017

VAT

*Update: Temporary changes to the VAT payments due between 20 March 2020 and 30 June 2020 have been announced to help businesses manage their cash flow as a result of the Coronavirus outbreak.*

Get email updates on VAT

Latest on VAT

All

Coronavirus information hub for charity tax and finance professionals

Digital links requirements for Making Tax Digital for VAT postponed until April 2021

Deferral of VAT payments due to the coronavirus crisis

VAT on Care Services provided by bodies other than Charities

Update: Temporary changes to the VAT payments due between 20 March 2020 and 30 June 2020 have been announced to help businesses manage their cash flow as a result of the Coronavirus outbreak.