Selling to a Charitable Trust

[dartissimus]

We are selling goods to a charitable trust, they have sent me a letter stating that they understand that we do not need to charge them VAT.
These are goods for resale not for their own use.
My accountant is uncertain and I'm also doubtful that they are VAT free.
Does anyone have any experience or knowledge in this area?

[Eric Mc]

A charity is not entitled to any Zero Rating of your charges purely because they are a charity.

In certain very restricted circumstances, a seller CAN] Zero Rate the sale of goods and/or services to a charity.

Here is a list of the type of things you can sell to a registered charity at Zero Rate -





You may be able to apply zero VAT when you sell the following to an eligible charity:

advertising and items for collecting donations
aids for disabled people
construction services
drugs and chemicals
equipment for making ‘talking’ books and newspapers
lifeboats and associated equipment, including fuel
medicine or ingredients for medicine
resuscitation training models
Equipment for medical and veterinary use

You may also be able to zero-rate some other medical and veterinary equipment when you sell it to:

certain health bodies, eg NHS Trusts
not-for-profit research institutions
charities that provide institutional care, or medical or surgical treatment for chronically sick or disabled people
charities that provide transport services for disabled people
charities that provide rescue or first aid services to humans or animals
someone buying it specifically for donation to one of these bodies
The money used to buy the equipment must be from charitable or donated funds. This should be stated on the eligibility declaration.

The eligible items include:

medical, veterinary and scientific equipment
ambulances
goods for disabled people
motor vehicles for medical use
rescue equipment
resuscitation training dummies

[dartissimus]

Thanks for that very thorough reply, so I guess the answer's no.
However I understand that if they register for VAT, they can claim it back retrospectively, within reasonable bounds, but that's not my problem

[Eric Mc]

Exactly. If they want to reclaim the VAT on their costs, they can register as a VAT registered entity.

[Simpo Two]

Eric Mc said:

Exactly. If they want to reclaim the VAT on their costs, they can register as a VAT registered entity.

Though I presume, as they are reselling, it would put their costs up 20%.

I think they're trying it on.

[Eric Mc]

Simpo Two said:

Eric Mc said:

Exactly. If they want to reclaim the VAT on their costs, they can register as a VAT registered entity.

Though I presume, as they are reselling, it would put their costs up 20%.

I think they're trying it on.

Depends on what they are selling as to what they apply VAT to.

[dartissimus]

They are a charity, and they're going to open a trading shop to raise funds and to provide employment for Down's Syndrome staff.
They are in the process of registering for VAT so should be able to retrospectively reclaim my VAT charges which they have paid.
We hoped that they could benefit from the VAT saving, but we've all agreed (partly thanks to your advice) that it's not possible.
However with a discount from me, we're hoping that they can take advantage of the north south divide and at least double up.

[Eric Mc]

Registering for VAT is the answerr. This means they will be able to reclaim any VAT they are charged on business related costs.

They should be able to avail of the VAT Second Hands Good scheme -



https://www.gov.uk/vat-margin-schemes/overview