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Introduction

This section and V6.185 examine important VAT considerations likely to be of relevance to the charity sector. This section looks at the liability of supplies and activities of charities. Determining the correct VAT treatment for charities can be complex, as there are a range of potential issues to consider, such as whether a charity is acting in the course or furtherance of business, whether its income is consideration for a supply and what reliefs are available for charities' business income. V6.185 looks at VAT recovery and other practical points for charities. This section also explores the reliefs from VAT which are available in certain circumstances on purchases by charities.

Business/non-business, donations and grants for charities

Business/non-business

Deciding whether a charity's activities are undertaken 'in the course or furtherance of business' is often both a very important and very difficult exercise. It is key to make this distinction, as the result may impact on whether a charity can or must register for VAT, whether it has to