Any VAT registered company can sell goods and services to charities. This guide explains how and when they can sell the goods at zero or reduced rates.
You must check they have eligibility for charity status and then apply the correct rate.
Note: Community Amateur Sports Clubs (CASC) do not qualify as a charity. That means they cannot receive VAT reliefs.
It is your responsibility to check whether the client has charitable status. They will need to produce evidence showing they are a registered charity.
The charity must provide you with a 'certificate' or written declaration. It will confirm whether they meet the conditions to get the relevant VAT relief.
Charities from England or Wales must supply their Charity Commission registration number. If they are from Scotland or Northern Ireland they will need a letter of recognition from HMRC.
It is a legal requirement for charities to supply an eligibility certificate any time your company supplies building or construction services. The specific information in the certificate means you can then issue invoices at the zero rate.
A declaration certificate is not required for other items sold at zero or reduced rates. But, the charity should still prove to you that they are eligible to get the relief.
The following declarations are example items listed on the government website. The samples show information that a charity would need to supply to your business:
Note: Invoices or order forms, for good or services supplied, need to be separate from the written declaration. The company is legally required to keep all completed declarations for at least 4 years.
Specific rules apply for supplying fuel or power to eligible charities at reduced VAT rates in the United Kingdom.
Zero rates may apply when a business sells the following to a registered charity:
Certain medical and veterinary equipment may also be zero-rated for VAT businesses if you are selling to:
Monies used for purchasing this equipment must be from donations or charitable funds. The eligibility declaration should state this for clarity. Items that are meet these regulations include:
Note: The GOV.UK website has a list of references and eligible items related to VAT and charity organisations.
Charging Value Added Tax to Charities in the United Kingdom