3rd June 2013, 09:21 AM
What would you suggest? VAT reclaim or VAT exempt. and how to decide who did and did not pay VAT? When your charity buys goods and services you will normally have to pay VAT just like anyone else. However, there are some VAT reliefs available for charities on certain goods and services which mean you may be able to buy them at the zero rate or reduced rate of VAT. For example, subject to certain conditions, your charity may be able to buy fuel and power at the reduced VAT rate, pay no VAT on advertising or pay no VAT on certain goods you make available to disabled people. Only charities are entitled to the special VAT reliefs for charities. To get these reliefs you will have to provide the person supplying the goods to you with evidence that you are a charity and a written eligibility declaration or certificate confirming that the conditions for the relief have been met. The charity VAT reliefs apply only to certain goods and services. You will still have to pay VAT on your other purchases at their normal rate. If your charity or organisation is VAT registered you may be able to claim back some of the VAT you are charged from HMRC under the normal VAT rules. See the sections in this guide on ‘Does your organisation need to register for VAT?’ and ‘Reclaiming VAT on your purchases’. Certain goods and services can be zero-rated for VAT when purchased by certain eligible bodies with charitable or donated funds or when purchased by someone else to donate to an eligible body. http://www.hmrc.gov.uk/charities/vat/intro.htm#2