Posted on July 22, 2015
Charities and Vat
We frequently find that charities are over-paying VAT on their costs. In particular, premises costs, such as rent, and gas and electricity provide opportunities for making savings.
Where a building is used for a charitable purpose, even if there is an element of business activity, gas and electricity should only be charged at 5%, not 20%.
You will need to provide a certificate to the suppliers. We can provide advice in relation to the issue of this certificate, as well as the template certificate at a sensible cost.
Rent is not so straightforward. This is because the rules mean that, where a charity uses a building for its administrative office, VAT will still apply. However, uses for other purposes mean that any VAT charge may be capable of being ‘disapplied’.
This also needs a formal certificate to be sent to the landlord/agent.
Issues involving charities and VAT can be complex. If you would like more information on this or any other charity VAT issue, get in touch today.