VAT on purchases from a charity

gazfocus

I have purchased a laptop from a UK LTD Company that is also VAT registered and is a 'not for profit social enterprise owned by a registered charity'.

I have received the laptop and with it came an invoice. The invoice has their UK Vat number on but it shows the VAT rate as 0% and show's the VAT amount as £0.00

Is this legit? I thought all companies had to charge vat or is it a special rule for charities?

JasonLVC

Donated goods when sold by a charity can be zero rated, so the lasptop may have been donated by a business and the charity wiped it/set it all up for re-sale.

Was it a brand new laptop or second hand?

gazfocus

Thanks - I understand donated goods can be zero rated and I understand that there are instances when used goods don't have vat charged on them.

It is a used laptop, but, it's a Dell Business laptop and the advert stated that an invoice would be issued with vat displayed seperately therefore leading potential customers to believe that they could claim back the vat.

I emailed the supplier and their response was "We are a registered Charity, and as such, we are not required to charge any VAT."

motorguy

gazfocus wrote: »

Thanks - I understand donated goods can be zero rated and I understand that there are instances when used goods don't have vat charged on them.

It is a used laptop, but, it's a Dell Business laptop and the advert stated that an invoice would be issued with vat displayed seperately therefore leading potential customers to believe that they could claim back the vat.

I emailed the supplier and their response was "We are a registered Charity, and as such, we are not required to charge any VAT."

So now theres no VAT payable, so you dont have to claim any back?

Not sure i'm seeing the problem?

JasonLVC

pgilc1 wrote: »

So now theres no VAT payable, so you dont have to claim any back?

Not sure i'm seeing the problem?

I guess if you were quoted £100 and that was a VAT inclusive price (as retail sales should be quoteed inclusive), then that means the buyer would have been able to reclaim £16 VATthus making the laptop cheaper.

if the charity has zero rated then technically they have charged VAt at 0% so if they advertise as "including VAT" they've not said anything wrong but appreciate that some folks may automatically assume that VAt of 20% has been added into the price.

its not the biggest tragedy in the world, but can understand where the OP might be coming from.

gazfocus

pgilc1 wrote: »

So now theres no VAT payable, so you dont have to claim any back?

Not sure i'm seeing the problem?

As JasonLVC said, we purhcased a laptop for £300 including VAT, meaning we were expecting it to cost the company £250, however, it's now cost us £300 because the supplier weren't honest enough to disclose that the vat was zero rated - probably because they know people would buy from other sellers that are the same price with 20% vat included.

ILW

gazfocus wrote: »

As JasonLVC said, we purhcased a laptop for £300 including VAT, meaning we were expecting it to cost the company £250, however, it's now cost us £300 because the supplier weren't honest enough to disclose that the vat was zero rated - probably because they know people would buy from other sellers that are the same price with 20% vat included.

I would have thought you would check that before placing the order.

motorguy

gazfocus wrote: »

As JasonLVC said, we purhcased a laptop for £300 including VAT, meaning we were expecting it to cost the company £250, however, it's now cost us £300 because the supplier weren't honest enough to disclose that the vat was zero rated - probably because they know people would buy from other sellers that are the same price with 20% vat included.

Ah. With you now.

I was thinking the prices would have been +VAT but i see what you mean now.

Mistral001

gazfocus wrote: »

As JasonLVC said, we purhcased a laptop for £300 including VAT, meaning we were expecting it to cost the company £250, however, it's now cost us £300 because the supplier weren't honest enough to disclose that the vat was zero rated - probably because they know people would buy from other sellers that are the same price with 20% vat included.

Yes, I would agree with you, but it would probably take court action to get a remedy. It takes a brave man to take a charity to court. I think most charities know this.

InsideInsurance

gazfocus wrote: »

As JasonLVC said, we purhcased a laptop for £300 including VAT, meaning we were expecting it to cost the company £250, however, it's now cost us £300 because the supplier weren't honest enough to disclose that the vat was zero rated - probably because they know people would buy from other sellers that are the same price with 20% vat included.

Would suggest you want to be careful about verging on libelous comments.

To the best of my knowledge there is no requirement for an organisation to state what rate of VAT has been included when they quote an inclusive price.

Often in B2B situations prices are quoted net of VAT to avoid the confusion and possible uncertainty because VAT, in the long term, often isnt an issue as it'll ultimately be reclaimed.

gazfocus

InsideInsurance wrote: »

Would suggest you want to be careful about verging on libelous comments.

To the best of my knowledge there is no requirement for an organisation to state what rate of VAT has been included when they quote an inclusive price.

Often in B2B situations prices are quoted net of VAT to avoid the confusion and possible uncertainty because VAT, in the long term, often isnt an issue as it'll ultimately be reclaimed.

I'm sorry but I'm not going to apologise for my comments. I accept there may be no requirement but it's very underhanded when a charity (actually a ltd company arm of a charity) advertises that VAT is included in the price stated. In my mind, the only reason anyone would state that when VAT is zero rated is because they would know it would mislead potential customers into thinking the VAT rate would be the standard 20%.