Liability ― charity funded equipment

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note examines the liability of charity funded equipment.

For an overview of VAT liability more broadly, see the VAT liability ― overview guidance note.

For in-depth commentary on the legislation and related case law, see De Voil Indirect Tax Service V4.266A.

Liability of charity funded equipment ― the basics

There is no blanket relief from VAT for charities buying goods and services. However, there are a number of specific reliefs that can apply in particular circumstances.

One relief that charities (and their suppliers) need to consider is the zero-rate for charity funded equipment. The precise scope of the relief can be relatively complex and is explored further in this guidance note. In broad (and oversimplified) terms the zero-rate can apply to certain goods and services of a medical, veterinary or scientific nature which are supplied to certain kinds of body where these goods or services are paid for using charitable or donated funds.

Care should be exercised to ensure that all the conditions for relief have been met before it is claimed.

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