Rulings give VAT hope to charities
More charities could be eligible for a zero VAT rating on building work, after two rulings from VAT tribunals.
Tribunals on the two cases ruled that because Quarriers was reliant on public donations to make up its funding, it was not in business and was therefore entitled to VAT-free construction.
“The watershed between being in business or carrying on a charitable activity can be critical for charities for VAT purposes,” said Debbie Jennings, VAT director at PKF accountants.
“The right to VAT-free new buildings and reduced rate VAT on fuel depends on charities being able to show that they are not in business.”