Charity: VAT reliefs on expenditure
Section One: Zero-rating
Charity: VAT reliefs on expenditure. Zero-rating relief on expenditure falls into two main sections: the first is where the expenditure is on certain types of goods and services, while the second provides relief for a wider range of goods and services where the expenditure is funded to/by charities/donation and the goods and services are supplied to certain “eligible bodies” and are used for certain specified purposes.
Part One: Specific goods and services to or for charities
VAT Notice 701/6/03, section 6 deals with general VAT reliefs for charities on purchases: http://tinyurl.com/6keb9mx
- Talking books for the blind and disabled
- Wireless sets for the blind
- Aids for the disabled
- Donations of goods
- Lifeboats
- Advertising
- Goods used by charities in connection with collecting monetary donations
- Medicinal products
- Substances for medical or veterinary research
Part Two: Charity funded equipment for medical, veterinary uses, etc
VAT Notice 701/6/03 http://tinyurl.com/3a7rpx
Charity: VAT reliefs on expenditure. This relief covers a variety of goods and services which are funded by charities or donation and for use in various eligible organisations, including hospitals, residential homes for the disabled and for the care or treatment of the disabled. It can include such expenditure as the following:
- Medical and research equipment, eg scanners, laboratory equipment
- Ambulances
- Certain motor vehicles with adjustments for wheelchairs or for organisations providing care for the elderly, blind, deaf, mentally handicapped or terminally sick
- Goods for people with disabilities
- Equipment including telecommunications, heat detecting devices for serach and rescue purposes
- Computer software for use in medical research, diagnosis or treatment
- Resuscitation training models
There are a number of detailed criteria that apply to these reliefs, including the fact that charities/purchasers must provide a certificate to the supplier of the goods concerned to confirm that the purchase is eligible for zero-rating. Information can be found here http://tinyurl.com/6cux5cj Supplement to VAT Notice 701/6/03.
Part Three: VAT Reliefs for disabled people
Although most of this information is included within the publications mentioned above, more detailed guidance about VAT reliefs for the disabled are included within the publications listed here on the HMRC website: http://www.hmrc.gov.uk/charities/vat-notices-disabled.htm
The notices include information on a range of issues that are specific to goods and services for the disabled and when such supplies can be zero-rated. The most comprehensive summary is in VAT Notice 701/7 which is here http://tinyurl.com/lnqxv. The contents summary at teh front of the notice is a very good place to start if you want a list of the goods and services that are relieved from VAT. Another important notice is 701/59: Motor vehicles for disabled people which is here: http://tinyurl.com/qbpmg
Section Two: Reduced Rated supplies
This applies in 2 categories:
- Fuel and power for use in certain residential buildings and for certain non-business use. See VAT Notice 701/19/10: Fuel and Power http://tinyurl.com/66ubn53
- Energy saving materials installed into buildings used for certain charitable purposes. See VAT Notice 708/6/06: Energy Saving Materials http://tinyurl.com/5uqqsan