European VAT Law largely dictates (and restricts) where the UK can apply VAT relief to charitable and not-for-profit organisations, and even where relief does apply; there are strict criteria to adhere to.
More and more Charities are realising that a commercial level of planning is the only real way to impact on the burden of VAT – more poignant than ever in the current economic climate. ‘Commerciality’ and ‘profit’ do not necessarily affect VAT and the smallest of trading activities can yield a VAT advantage.
That said it is important to keep the administrative burden associated with VAT relief, VAT reclaim or even VAT Registration in context and we can help you determine the financial impact of these to see if the administrative ‘cost’ is indeed worthwhile.
If you are already Registered for VAT; have you or your Accountants considered the impact of a Special Partial Exemption method over that of the Standard Method? Again we would be happy to help in this regard and provide absolute certainty as to the VAT treatment of your income.
BUILDING & CONSTRUCTION
Whilst limited, VAT relief should always be considered. Broadly this permits a Zero Rate of VAT on new builds and ‘independent annexes’ – providing they are for charitable use.
‘Charitable use’ effectively prohibits commercial or income generating activities. Previously HMRC permitted commercial use (for example rental income from 3rd parties) providing it was below 10% of the buildings use – as of 1 January 2010 the concession is restricted to less than 5% of the buildings use.
CHARITY & NOT-FOR-PROFIT ORGANISATIONS WE HAVE WORKED WITH