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Electron VAT Consultancy – VAT Advice for the Charity & Education Sectors

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Unfortunately, due to the sudden death of the Sole Proprietor this business will no longer continue. If you have any queries or outstanding issues please contact David Booth at his email address boothy55@yahoo.co.uk.

Both the charity and education sectors have significant income streams that are not subject to VAT. These can be either exempt from VAT or outside the scope of VAT. Sometimes both!

It is very common for charities and education businesses to not fully understand the VAT legislation relating to their income streams because of the complexity. Electron VAT Consultancy has been commissioned to perform a number of reports to review these income streams and provide definitive guidance on whether they are subject to VAT, or not. This provides piece of mind and can also be used as evidence of “due diligence”, especially to the Charity Commission or as part of the process of obtaining grant funding.

The liability of the income streams can affect the VAT that can be reclaimed on the purchases and expenses incurred by these sectors. This may result in either partial exemption calculations and/or business/non-business apportionments having to be carried out to determine a percentage of the VAT incurred that can be claimed back from HMRC.

Charities can qualify for what are termed as “social reliefs” within VAT legislation. These usually take the form of their suppliers being able to zero-rate their goods and services to a charity, provided that certain conditions are met. Also, HMRC can sometimes allow charities extra-statutory concessions which effectively means that HMRC “turn a blind eye” to the law because it is deemed to be unfair if it is enforced. In both cases proper VAT advice can result in reducing the impact of VAT on core activities.

Please be aware that some grant funding in both the charity and education sectors may be subject to VAT legislation. It could be regarded as either taxable or exempt, with both having VAT implications. Unfortunately, I have come across situations when the grant has been allocated to core activities before the VAT implications were realised, often leaving a funding deficit. Affordable VAT advice can avoid this situation.

Finally, in the case of charities and other non-profit making organisations I am sometimes prepared to “cap” my time i.e. for budgeting purposes the charity knows the maximum cost of my work. Also, if I do not exceed the “cap” then I only charge for the time taken.

For more information call us today on 01204 437443 or contact us online to arrange a consultation