VAT: Charities

Treasury written question – answered on 8th December 2022.

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Photo of Dan Jarvis Dan Jarvis Labour, Barnsley Central

To ask the Chancellor of the Exchequer, if he will exempt charities from VAT where a minimum donation on goods is required.

Photo of Victoria Atkins Victoria Atkins The Financial Secretary to the Treasury

Where a charity chooses to offer its goods or services for free and invites voluntary donations, with no minimum payment required and with no expectation of anything in return, no VAT is charged.

Where the charity wishes to sell its goods and services for a set price, and is VAT registered, it must charge VAT unless a VAT relief exists. There is no VAT due on an amount paid voluntarily over and above the set price.

Charities benefit from a range of tax reliefs, including a zero-rate relief for the sale of donated goods. Costed tax reliefs value these at over £5.4 billion in the year ending April 2022.

While all taxes are kept under review, we have no plans to make changes to the VAT treatment of minimum donations.

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