Charities & Not for Profit
Our specialists can assist in a range of VAT & Tax areas
The VAT returns for charitable and not for profit organisations (NFOs) can be incredibly complicated to work out. In some cases, charities are subject to the same rules that apply to commercial businesses, and may be liable for VAT reliefs. Charitable organisations don’t always recognise this fact and may consequently make errors in their calculations.
For example, many charities or NFOs are partially exempt from VAT. This means that some of their income is not subject to VAT, and some of the VAT on their purchases is not recoverable. There is a fine line between business and non-business income. For instance, a greater proportion of contracts are now being structured as contracts for service, and this results in them being subject to VAT.
Deeks VAT Consultancy can advise on the VAT liability of numerous income streams, such as grant income and sponsorships. Calling some income “grant income” doesn’t necessarily mean that VAT should not be accounted for. Also, if a charitable organisation receives a gift, it doesn’t count as business income, but if something is expected in return then that may make the funds subject to VAT.
We can assist with non-business and partial exemption calculations and determine whether a charity or NFO has been making the correct payments. In certain cases, we may negotiate refunds or adjustments with HMRC on behalf of clients. We’ll also review whether charitable organisations are taking full advantage of the available VAT and Tax reliefs, including concessionary treatments and charity-specific relief opportunities.
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