The government released a policy paper announcing a future consultation on the VAT treatment of charitable donations. They plan to introduce a targeted VAT relief for low value goods donated by businesses to charities for free distribution to those in need. A press release confirmed the new VAT relief and stated that the consultation will be launched before July 23, 2024, with the conclusion to be announced at a later fiscal event. The relief will not apply to goods donated for the charity’s use, such as new IT equipment, in order to prevent VAT avoidance. The consultation will seek views on this issue.
Source KPMG
