Whilst it may be said that Charities are exempt from tax this statement does not extend to the application of the VAT regime to charities. This can lead to real challenges in maximising VAT savings and VAT recovery in relation to a capital project where embedded VAT costs can affect the viability or funding success of a project.
VAT issues for charities generally represent one of the more complex areas of the VAT. This arises because most charities generally undertake a diverse variety of activities which means revealing the optimum VAT position requires consideration of a multitude of factors including:
- VAT classification of business activities
- VAT classification of non-business activities
- Benefits of, and requirement to register for VAT
- Calculation of best method of determining VAT recovery for costs incurred on project
- Application of zero rate of VAT to construction works procured
- Application of reduced rate of VAT to construction works procured
- Certifying qualifying use for purpose of lower rated construction works
- VAT refund scheme for galleries and museums
- Listed Places of Worship Grant Scheme
- Charity law restrictions
- Project procurement route
- Long term intentions and actual use
- Budgetary VAT estimates for funding applications
Landmark PT has experience in resolving construction and property related VAT issues for community centres, religious buildings, museums, galleries and charitable residential establishments.
Please do not hesitate to contact us for a fee proposal for our services.