Sector VAT Issues
Charities face the same VAT management issues as any other organisation that starts to trade. A failure to recognise trading income as subject to VAT will result in VAT registration requirements being missed. VAT assessments raised in a charity from historic errors can cause major financial pressures and risk closure.
VAT registration issues clearly are a concern and this is highlighted by continuing lack of clarity on the nature of funding a charity may receive – that classic is it a grant or is it a contract question?
Opportunities do exist as well so it’s important to maximize access to the limited VAT reliefs available and keep up to speed with VAT changes.
Additionally, the need to effectively cost in any irrecoverable VAT to grant applications to ensure projects will be fully funded is vital especially when funding projects that relates to property enhancements or acquisitions.
Some large charities generate major streams of business income from their trading activities and therefore require close attention from the VAT management perspective as often this income generation can be in areas of property rental, health & welfare provision, education or lotteries – all areas where a VAT exemption can apply and result in blocked VAT recovery issues.
How Centurion can help
The Charity sector is diverse in its operation and so too are the VAT issues it will face. Common themes do emerge however and the Centurion Charity VAT specialists each bring 30 years of VAT experience to help resolve them.
Our specialist team offer support from bespoke VAT training through to dealing directly with HMRC on behalf of our client. A VAT Health check review may deliver the assurance of good compliance a Trustee is seeking or may equally identify areas where VAT savings could exist.