Advice on VAT, tax and PAYE for charities
There is a general misconception that charities
are exempt from income tax, corporation tax and VAT
and other taxes. However, this is not always the case!
For more specific details on trading by charities
Income tax and corporation tax
Provided that certain conditions are met, many of
the activities of charities are exempt from income
and corporation tax, and this can be true even of
large scale trading activities. This is only true,
however, if the correct legal structures are put in
place, and are properly managed and correct procedures
are followed. Care has to be taken that the steps
that are taken for taxation purposes do not compromise
the charitable status.
VAT for charities can be a complex area where we
are able to provide specialist advice. The understanding
of the classification of different sources of income
for VAT purposes and how this impacts on a charity’s
VAT position is an area where we have been able to
make significant savings for our clients.
There are a number of VAT exemptions and reliefs
available, for example for the sale of donated goods,
or VAT on rents of properties, on expenditure on refurbishments
and so on. There are also reliefs available on VAT
on heat and light.
Unified Business Rates & Climate levy
There is mandatory relief of up to 80% from business
rates, and a further 20% discretionary relief. Charities
are exempt from the climate levy charge on heat and
light, but often have to fight to obtain the exemption.
The advice we can offer
Complexity is the name of the game in this area,
and often the authorities are ignorant of the application
of the reliefs, and so charities are often taxed by
We can advise and assist on specific problems as
they arise from time to time. We can also undertake
a taxation health check to see that all the exemptions
available are being claimed, or that there are no
circumstances arising that might unwittingly give
rise to a tax charge.
We can offer detailed strategic and tactical advice
on how to structure trading operations to ensure that
unwelcome taxation bills do not arise. see ‘Trading
As with all our services, our fees are highly competitive.
Our offices are set in a rural location, and therefore
we have low premises overheads. This means that we
are able to offer the highest quality services, very
often at the lowest price.
For further information, please email firstname.lastname@example.org
or complete our Enquiry