Does my charity have to pay VAT on goods and services we buy in?

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When considering VAT on goods and services bought in by the charity, there are two different aspects to consider. The first of these is whether VAT should be paid at all – this is discussed in this section of the website. The second point is whether if VAT must be paid, whether all or any of it can be reclaimed from HMRC.

More information about this can be found here.

There is no general exemption which relieves charities from VAT on the goods and services they buy in, but there are some reliefs for VAT which are specific to charities such as VAT on advertising, some goods and services purchased for people with disabilities, certain items used for medical or veterinary research, training, diagnosis and treatment;, ambulances and adapted vehicles; search and rescue vehicles some construction works and energy costs in certain circumstances.

Lower and zero rate VAT and VAT exemption also applies to some items whoever is buying them. This includes things like food, public transport, books, water, rent and lease payments, finance services, insurance etc. You can find a list of VAT rates published by HMRC here.

When a charity buys services from a supplier based overseas, the charity may be responsible for declaring the UK VAT due on the supply. This is explained here.

Also, when a charity buys goods from a supplier based overseas, the charity will normally have to pay VAT on the goods when they are imported into the UK.

HMRC guidance

HMRC guidance on charity advertising can be found in Goods or services supplied to charities (VAT Notice 701/58), para 2 -4.
HMRC guidance for their own staff on charity advertising can be found at VCHAR5000
HMRC guidance on VAT reliefs for goods and services purchased for disabled people can be found in Reliefs from VAT for disabled and older people (VAT Notice 701/7)
HMRC guidance for their own staff can be found in their VAT Relief for Disabled People (VRDP) manual.
HMRC guidance on goods which qualify for zero rating for medical or veterinary use, including ambulances and adapted vehicles, and search and rescue equipment, can be found in VAT Notice 701/6 -Charity funded equipment for medical and veterinary uses.
HMRC guidance on VAT reliefs for construction work can be found in VAT notice 708 Buildings and Construction
HMRC guidance on VAT reliefs for energy saving materials can be found in VAT notice 708/6
HMRC guidance on the place of supply rules is in VAT Notice 741A.

CTG does not provide tax advice and so the information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.