Specialist Service
Charities and non-profits face some of the most technically demanding VAT questions of any sector, usually without the VAT recovery that businesses take for granted.
Why Charities & Non-Profits
Non-profit VAT doesn't behave like ordinary business VAT.
Most non-profits can't recover much of the VAT they incur, so mistakes land as a real cost rather than a timing issue — and they're rarely spotted until a HMRC review or an annual audit.
We act for charities, non-profits, and the public sector bodies working alongside them, and alongside the accountants and trustees advising them.
What We Advise On
From a single grant funding question through to a full VAT health check.
Which activities count as business for VAT purposes, and the impact on recovery.
Apportionment methods for mixed exempt, taxable, and non-business income.
Reliefs on construction, advertising, and goods — and what qualifies you for them.
Whether a grant creates a taxable supply, or falls genuinely outside VAT.
Applying the fundraising event exemption correctly, and meeting every condition.
Structuring advice for charities operating a trading subsidiary, including VAT grouping.
Contracted-out services, section 41 refund schemes, and procurement VAT issues.
A full review of your VAT position, surfacing risks, errors, and missed recovery.
How It Works
Charity VAT questions rarely have a single, generic answer. Our process is built to give you one that actually fits.
A short call or exchange of documents to understand your income streams, activities, and current VAT position.
We work through the VAT position against the facts — business/non-business, exemption, reliefs, and any partial exemption method in use.
A clear written note setting out the VAT treatment, the risk areas, and the practical steps needed — in plain language your trustees and finance team can act on.
Help agreeing a partial exemption method with HMRC, structuring a trading subsidiary, or reviewing a grant agreement before it's signed.
Questions
A starting point only.
It depends on the mix of your income. VAT can only be recovered against taxable business activity. Exempt income and non-business activity, such as most grant funding and free services, generally block recovery in full or in part, which is why partial exemption is central to charity VAT.
Only if it's really a payment for a service. A genuine grant, given with no expectation of anything specific in return, sits outside the scope of VAT. Many funding agreements include reporting or delivery conditions that tip them into being a taxable supply instead, so the wording matters more than the label.
Reliefs exist for advertising, certain goods, and construction works for a relevant charitable purpose, among others. Each has its own conditions and evidence requirements, and getting them wrong can mean an assessment years after the event, so it's worth confirming eligibility before you rely on one.
Usually to ring-fence non-charitable trading, such as retail or sponsorship income, so it doesn't put the charity's tax status at risk. The VAT position of a subsidiary is not automatically the same as the charity's, and the two need to be considered together, including whether VAT grouping is worthwhile.
Insights
Property and non-profit VAT often meet in practice — charity buildings are a common example.
Free one-hour consultation. All engagements fixed-fee.