Government Seeks Input on New VAT Relief for Charitable Goods Donations to Aid Needy

• The government is considering a new VAT relief for goods donated to charities for distribution or service delivery.
• Current VAT rules depend on how charities use donated goods, with zero rating possible if goods are sold.
• If goods are used differently, businesses may need to account for VAT at the standard rate.
• The government aims to prevent tax avoidance while encouraging charitable giving and reducing landfill waste.
• A consultation was launched to explore aligning rules without compromising VAT system security.
• Potential restrictions for the new relief include limits on the value and characteristics of goods, usage, recipient eligibility, and charity type.
• Businesses benefiting from the relief must conduct checks and maintain records for HMRC inspection.
• Charities may need to provide guarantees on the intended use of goods.

Source: icaew.com

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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