VCHAR3200 | Business and non-business: Charitable activities: Implications of being in business for a charity

The VAT implications for a charity of being engaged in business activities are wide ranging. They include:

• the possibility of being liable to register for VAT or being able to register voluntarily for VAT

• if VAT registered, the need to account for output tax on standard-rated and reduced-rated taxable supplies

• if VAT registered, the entitlement to reclaim input tax to the extent it relates to the taxable business activities of the charity

• the restriction of some VAT reliefs that relate to the non-business activities of the charity (eg fuel and power, new construction).