VAT can be a significant cost to a charity or not-for-profit organisation. The complexity of the VAT regime also creates the potential for costly pitfalls and errors.
If total taxable income from business activities exceeds the VAT registration threshold – £81,000 in 2014-15 – the charity must register for and charge VAT. Charities below that threshold may choose to register voluntarily, in order to reclaim the VAT on certain expenditure that would otherwise be irrecoverable.
As well as registration issues and the VAT exemptions and reliefs to which they may be eligible, charities also need to get to grips with other aspects of VAT, including the sale of donated and bought in goods and fundraising events.
At Haslers, we offer specialist expertise in VAT and can provide advice on VAT registration, both mandatory and voluntary, VAT compliance and VAT recovery, to maximise VAT efficiency and improve your day-to-day VAT administration.
We also provide advice to maximise the VAT efficiency of a one-off transaction or of a project involving capital expenditure.
Contracts are liable to VAT and grant income is not, but grey areas can occur between the two. We provide advice to ensure that the wording of such arrangements make clear their status and do not create unnecessary VAT liabilities through ambiguous language.
To help charities and not-for-profit organisations improve their overall financial health, we also carry out comprehensive VAT audits to identify where changes can be made to help save money, correct weaknesses and reduce risks, while always maintaining compliance with the VAT regime.
To find out more about Haslers’ East London and Essex-based accountancy, tax and business advisory services for charities, please contact us.