Under an Extra-Statutory Concession, certain items used in connection with collections of monetary donations can be zero-rated when provided to a charity.
The ESC covers the following:
With effect from 1 August 2003 the package test concession has been extended so that some of the charity stationery zero-rated under the ESC will also count as zero-rated for the package test. If the test does not result in zero-rating of the package, a charity will still be able to claim zero-rating on any item which qualifies for relief either under Schedule 8, Group 3 or the ESC.
The following will also qualify for relief:
The last of these reliefs is restricted to small items designed to be worn on clothing, of a kind traditionally attached to the lapel: paper stickers, ribbons, artificial flowers (if these are used as a symbol of the charity) and metal pins and badges. The relief also covers emblems or badges given in return for any non-specified donation or a suggested donation of up to £1.
For further information please refer to Chapters 6 and 7 of HMRC VAT Notice 701/58: charity advertising and goods connected with collecting donations