- Charities are subject to complex VAT rules and face significant VAT costs, despite some limited reliefs.
- VAT is not recoverable on expenses for non-business activities and exempt supplies, increasing the financial burden on charities.
- Legal uncertainty exists over what constitutes “business income” for charities, especially regarding grants.
- Charities should seek professional advice, review VAT procedures, and utilize available reliefs to minimize VAT liabilities.
- The distinction between ‘trading’ and ‘business’ is important for VAT purposes, as VAT rules may apply to some charitable activities.
Source: marcusward.co
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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