VAT refund schemes

Ordinarily, it’s not possible to for charities to recover the VAT incurred on goods and services purchased to support non-business activities. In certain circumstances, however, there are schemes to reimburse this otherwise irrecoverable VAT.

Introduced in 2001, the VAT refund scheme for museums and galleries (Section 33A of the VAT Act 1994) is aimed at supporting the provision of free access to museums and galleries in the UK. The scheme allowed national and university museums and galleries to claim back VAT incurred on most goods and services purchased in order to grant free rights of admission to their collections. Further information can be found in HMRC VAT Notice 998: VAT refund Scheme for national museums and galleries.

In 2015, following campaigns by CTG and sector partners, the Government extended the VAT refund scheme to four new categories of qualifying charities(sections 33C and 33D of the VAT Act 1994).

  1. Palliative care charities
  2. Air ambulance charities
  3. Search and rescue charities
  4. Medical courier charities

HMRC VAT Notice 1001: VAT refund scheme for certain charities provides guidance on what activities qualify for the scheme, and how the refund of the VAT can be made.

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