VAT update: issues affecting the charity sector

More information

Every charity will have its own specific circumstances and hence a more targeted approach should be considered. If you’re in need of additional support, a VAT review undertaken by our Charity VAT specialists might be helpful.

Areas normally considered during a review include: 

• The VAT treatment of supplies to ensure the correct VAT liability is applied
• Whether funding is grant funding or payment under a contract  
• The attribution and treatment of VAT incurred on costs
• Whether any VAT recovery/partial exemption method is fit for purpose
• The VAT implications of any capital projects
• Whether charitable reliefs are being maximised
• Whether VAT registration or Group registration is appropriate

Ultimately every review is tailored to the activities of your charity and will include any specific areas that you bring to our attention. We can also consider the VAT accounting audit trail and whether it will comply with the requirements of MTD from 1 April 2021.

A report setting out our findings and recommendations is prepared once the review process is completed. In addition, where required, the review can be followed up with bespoke VAT training for relevant staff and manuals or guidance notes to assist with ongoing compliance.