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VAT on refurbishment of donated goods by a charity

A charity wishes to sell eletrical goods, which have been donated, eg, washing machines, fridges, etc.  If any repairs are necessary to make the item workable, such as replacement parts, does this change the VAT position.  The sale of donated goods are usually zero rated, but I wondered if the fact that an item is made usable, does this change the position? 

Many thanks

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There comes a point...

... I imagine, that the repairs are such that the goods that the charity's selling are no longer the goods that were donated to them.

Until that point's reached though, the charity's selling donated goods.

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08th Jun 2012 15:24

Zero rated sale of donated goods

Zero rating will apply where goods are prepared for sale. HMRC Internal Guidance states: "The goods can be cleaned or repaired as long as this does not alter their structure or original use." Thus, essential minor repairs, as you describe, will not prevent the onward sale from being zero rated. AND any input tax on the parts and repair work can be recovered, if the charity is VAT registered.

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