Since the last edition of Charities newsletter, HMRC
has announced a change to the definition of 'charity' for
VAT purposes. From 1 April 2012, the definition for VAT purposes is
the same as the definition given for charities that claim gift
In order for a charity to obtain VAT relief on the purchase of
certain eligible goods and services, a charity will need to ensure
that it meets the new definition in order to provide the relevant
certification required by the supplier for zero-rating.
HMRC has published draft legislation relating to the
implementation of the costsharing VAT exemption. The legislation
will be enacted when the Finance Bill receives Royal Assent in the
This year's Budget contained some VAT changes that will be
of interest to charities. The zero-rating of approved alterations
to certain listed charitable and residential buildings is to be
withdrawn from 1 October 2012. HMRC will, however, extend the grant
scheme currently offered by the department for culture, media and
sport to reimburse an amount equal to the VAT charged on alteration
works to listed places of worship.
The reduced VAT rate (currently 5%) for the installation of
energy saving materials in certain charitable buildings will also
be withdrawn, but not until 2013.
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