Charging VAT to charities
As a VAT-registered business, you can sell certain goods and services to charities at the zero or reduced rate of VAT.
It's your responsibility to check the charity is eligible, and to apply the correct rate.
Check the charity is eligible
To make sure the charity is eligible, ask them for:
- evidence that they're a charity
- a written declaration or 'certificate' confirming they meet the conditions for the particular VAT relief
Evidence of charitable status
The charity should give you either:
- their Charity Commission registration number
- a letter of recognition from HM Revenue and Customs (HMRC) if they're not registered with the Charity Commission for England and Wales (eg if they're a Scottish or Northern Irish charity)
Charities are legally required to give you an eligibility certificate when you supply eligible building or construction services to them at zero VAT. The certificate must contain specific information.
A declaration is not legally required for other items you sell at the zero or reduced rate, but you should ask for one to prove the charity is eligible for the relief.
These sample declarations contain examples of the information a charity should give you when buying:
- medical and scientific equipment, motor vehicles and computer software
- charity advertising
- goods and services for disabled people
The written declaration should be separate from the order form or invoice for the goods or services the charity is buying.
You must keep the completed declarations for at least 4 years.
Items that qualify for the reduced rate
Items that qualify for the zero rate
You may be able to apply zero VAT when you sell the following to an eligible charity:
- advertising and items for collecting donations
- aids for disabled people
- construction services
- drugs and chemicals
- equipment for making 'talking' books and newspapers
- lifeboats and associated equipment, including fuel
- medicine or ingredients for medicine
- resuscitation training models
Equipment for medical and veterinary use
You may also be able to zero-rate some other medical and veterinary equipment when you sell it to:
- certain health bodies, eg NHS Trusts
- not-for-profit research institutions
- charities that provide institutional care, or medical or surgical treatment for chronically sick or - disabled people
- charities that provide transport services for disabled people
- charities that provide rescue or first aid services to humans or animals
- someone buying it specifically for donation to one of these bodies
The money used to buy the equipment must be from charitable or donated funds. This should be stated on the eligibility declaration.
The eligible items include: