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  • FIRST POST
    • JulesBee
    • By JulesBee 10th Apr 18, 5:06 PM
    • 5Posts
    • 0Thanks
    JulesBee
    VAT and Community Interest Companies
    • #1
    • 10th Apr 18, 5:06 PM
    VAT and Community Interest Companies 10th Apr 18 at 5:06 PM
    Hi and thank you for reading....

    If a community interest company that is VAT registered receives a 'donation' with no restrictions - do we have to pay the 20% VAT over to HMRC as if the donation was income?

    Thank you

    Julia
Page 1
    • UglyJoe
    • By UglyJoe 10th Apr 18, 5:22 PM
    • 26 Posts
    • 14 Thanks
    UglyJoe
    • #2
    • 10th Apr 18, 5:22 PM
    • #2
    • 10th Apr 18, 5:22 PM
    Hi and thank you for reading....

    If a community interest company that is VAT registered receives a 'donation' with no restrictions - do we have to pay the 20% VAT over to HMRC as if the donation was income?

    Thank you

    Julia
    Originally posted by JulesBee
    I can't help thinking that with the above question, and the other thread you created today
    http://forums.moneysavingexpert.com/showthread.php?t=5824784
    you really should consult an accountant, as you clearly have no idea.

    In the meantime, if it's a financial donation (freely given, no strings attached i.e. a gift), this would not be a business activity and so would be outside the scope of VAT.
    • daveyjp
    • By daveyjp 10th Apr 18, 7:02 PM
    • 7,429 Posts
    • 5,911 Thanks
    daveyjp
    • #3
    • 10th Apr 18, 7:02 PM
    • #3
    • 10th Apr 18, 7:02 PM
    There is no VAT on donations.

    You should however take advantage of gift aid.
    • JulesBee
    • By JulesBee 16th Apr 18, 3:58 PM
    • 5 Posts
    • 0 Thanks
    JulesBee
    • #4
    • 16th Apr 18, 3:58 PM
    • #4
    • 16th Apr 18, 3:58 PM
    Hi and thank you for reading....

    If a community interest company that is VAT registered receives a 'donation' with no restrictions - do we have to pay the 20% VAT over to HMRC as if the donation was income?

    Thank you

    Julia
    Originally posted by JulesBee


    You are right - I don't have any idea and that is why I am asking the community... and I have an accountant already in place both for my own Limited Company and the CIC - the reason I am asking is that I like to have understanding in my head before engaging with the accountants - is that so wrong?
    • Pennywise
    • By Pennywise 16th Apr 18, 5:20 PM
    • 9,982 Posts
    • 18,458 Thanks
    Pennywise
    • #5
    • 16th Apr 18, 5:20 PM
    • #5
    • 16th Apr 18, 5:20 PM
    There is no VAT on donations.
    Originally posted by daveyjp
    True, but the receipt of donations may well impact on the charity's ability to reclaim input VAT on its expenses as it may bring the partial exemption rules into play. Definitely one for a specialist VAT accountant rather than an internet forum.
    • daveyjp
    • By daveyjp 16th Apr 18, 9:38 PM
    • 7,429 Posts
    • 5,911 Thanks
    daveyjp
    • #6
    • 16th Apr 18, 9:38 PM
    • #6
    • 16th Apr 18, 9:38 PM
    Thats why the CIC needs setting up properly.

    One company and accounts for membership payments etc, other Ltd companies and accounts for any trading activities.
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