VAT and charities

VAT and charities

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Rotary Club, itself a charity, wants to purchase a coach to hand over to local charity. Any way of avoiding the VAT?

Replies (5)

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chips_at_mattersey
By Les Howard
16th May 2012 13:56

Zero rating unlikely

The charity cannot benefit from zero rating unless the vehicle is specially adapted for use by a handicapped person or persons.

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By Ruddles
16th May 2012 14:24

Thanks, Les

Some further info:

The bus, before adaptation, sat less than 16 passengers. It has been permanently adapted to allow wheelchair use (hydraulic lift, wheelcahir anchors etc) and will now carry a maximum of 12 passnegers, including wheelchair user(s). The bus is to be given to a local church for outreach use. My reading of the legislation is that zero-rating does not apply because (a) it will not be used for domestic or personal purposes or (b) is not being provided to an eligible body (arguably, the church might be considered to be caring for handicapped persons, but I think that would be stretching the truth).

I was just hoping that I may have missed something - doesn't look like it,

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chips_at_mattersey
By Les Howard
16th May 2012 14:55

Zero rating unlikely
I am inclined to agree with you. The fact that the vehicle is permanently adapted, and supplied to a charity, may open the door to zero rating. However, the fact that the use to which the vehicle is to be put is for the specific purposes of the charity will prejudice zero rating.

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avatar
By Chris Smail
17th May 2012 00:56

Can you create a new eligible body?

Could the outreach project be seperatly identified and put into a separate (charitable) entitiy that would qualify as an eligible body?

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chips_at_mattersey
By Les Howard
17th May 2012 14:38

Eligible body?

In principle, the eligible body, assuming it is a charity, has to provide care or medical or surgical treatment for handicapped persons (Group 15, Note 4f), and it has to have a day centre, or similar, from which it operates (Notes 4A and 4B). It is possible therefore, but would need some thought if such a centre is not already operated.

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