Recent research undertaken for the Charity Tax Group estimated
that: -
- charities lose £1.8 billion per year by being unable to
recover all of the VAT on the goods and services they buy
- a significant proportion of the £1.7 billion output VAT
charged by charities each year is absorbed by charities rather than
being passed on to their 'customers' and therefore is a
burden on the charity sector
- VAT reliefs on purchases by charities are estimated to be worth
£1.0 billion annually for the sector
A suggested 3 step plan for Charity Finance Teams
Step 1- Overview, or, "Three key themes to
consider"
- Optimal VAT treatment of income
Establishing the correct VAT treatment of charitable income is
complex, and there can be significant costs if the wrong treatment
is applied.
