The tax system is more complicated than ever with the
unfortunate consequence that many organisations that have little
manpower and cash resource to deal with administrative complexity
are having to spend time and money to ensure that they stay on the
right side of HM Revenue & Customs.
Here are our top tips on the tax issues charities should
constantly be considering:
VAT
VAT comes top of the list as it is the tax that people most
often overlook, particularly in the charity sector where the income
which a charity generates may not be subject to income/corporate
tax.
Whether or not an activity is charitable or not is irrelevant
for VAT. The key concept is whether or not a supply of goods or
services has been made in the "course or furtherance of a
business". Even though a charity operates on a non-profit
making basis, supplies made by that charity can still be made in
the course or further of a business and therefore liable to
VAT.
