Registration for VAT

Many charities face the question of whether they have to register for VAT, or whether they can do so.

Where a charity has business activities, it is entitled to be registered for VAT, whether or not its turnover is over the registration threshold. Some charities retain trading activities within the charity; others incorporate a trading subsidiary. If the charity itself is a corporate body (ie: a limited company), then a Group registration may be considered. This would mean the charity and trading company share a VAT registration number.

If ‘taxable turnover’ exceeds the registration threshold, registration for VAT is mandatory. Taxable turnover excludes non-business income, and also excludes VAT-exempt income. The threshold applies to taxable turnover in any 12 consecutive months.

If you are engaged in a property development, with any business activities, such that you are entitled to register for VAT, it is advised to seek registration at ann early stage, so as to allow recovery of VAT.

And, make sure that decisions are recorded in writing for future reference for Trustees.