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I have a charity client who works with another local branch of the same charity. They work together to provide a mobile animal clinic, my client owns the mobile clinic and recieves donations from the other branch for the upkeep/running costs of the mobile. My client will then visit areas in the mobile clinic that the donating branch covers.

My question

Is the donation VATABLE as the second branch is receiving something for the donation or could it be argued that the branches are working together in a mutually collaborative area (Taken from HMRC VAT guidance sonsorship 701/41)

 

Thanks for any input

 

Jonathan

 

Replies

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06th Jun 2019 10:11

I'm not seeing a supply here. Though I see your concern.

Is there a contract ?

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to lionofludesch
06th Jun 2019 10:18

No contract that i am aware of, paperwork is not the best. I am struggling to get any paperwork to do with the matter.

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06th Jun 2019 10:24

Is there any obligation to visit the donor's area ?

And to whom is the service supplied ?

I'd say it was to the animal owners, not the donor branch.

Is owt being supplied to the donor ? I'd say no. But you have better information.

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06th Jun 2019 10:29

Agree with the lion. There doesn't seem to be a supply - the payment just looks like donation to me.

Even if that doesn't hold, the "shared endeavour" provisions seem relevant, so again, no taxable supply.

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06th Jun 2019 10:37

Thanks both for your input it is much appreciated

The supply is made to the animal owners, I am not aware of anything being supplied to the actual branch.

I am a lot happier now as you both have the same opinion as me.

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to jonibarnes
06th Jun 2019 10:44

jonibarnes wrote:

I am a lot happier now as you both have the same opinion as me.

"Who is supplying what to whom ?"

Get that right and it answers 93.6% of all VAT questions.

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06th Jun 2019 12:10

Not disagreeing, but the consideration doesn't have to come from the person receiving the supply. If there is a supply and there is consideration, there is VAT to consider.

However, lion is quite correct to stat that "who supplies what to whom" is the starting point.

The OP says that we have one branch of a charity working with "another local branch of the same charity". Are they different taxable persons? If the "who" and the "whom" are the same person, there is can be no consideration passing, and they're just moving money beteween the two branches.

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