The supply by a charity of ‘welfare services’ and any goods supplied in connection with those welfare services is exempt from VAT. Accommodation and/or catering that are ancillary to the main supply of welfare care services are also exempt from VAT.
‘Welfare services’ means services directly connected with:
For more information see HMRC VAT Notice 701/2:welfare.
‘Welfare’ is a non-business activity rather than exempt where it consists of care for distressed people and subsidised by at least 15 per cent.