Consultation on the VAT treatment of business donations of goods to charity

The government is consulting on the introduction of a VAT relief for goods donated to charities for free distribution or use in delivering services, aiming to align current VAT rules that only relieve VAT on goods sold through charity shops.
The consultation, closing at 11:59pm on 21 July 2025, seeks feedback on the design of this VAT relief, including eligible goods, administrative aspects, and the operating models of businesses and charities affected by these changes.
The government acknowledges that existing VAT rules, intended to prevent fraud, do not adequately support charitable donations for service delivery, and is exploring options to modify these rules without compromising the VAT system’s integrity.