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Charities: VAT

Question for HM Treasury

UIN 112174, tabled on 7 November 2017

To ask Mr Chancellor of the Exchequer, what assessment he has made of the potential financial effect on charities of his Department's Making Tax Digital scheme; and if he will make an assessment of the potential merits of exempting charities from liability for VAT.

Answered on

13 November 2017

The Government is firmly committed to helping charities and the voluntary sector and recognizes the important role they play in communities all across the UK. There is a range of generous tax reliefs to the sector worth more than £5bn, including VAT reliefs.

Following extensive consultation the Government has announced that for direct tax purposes charities will be exempt from the Making Tax Digital requirements, but that trading subsidiaries of charities will not be. In the interests of parity of treatment across all businesses, where a charity is liable to be registered for VAT and has taxable turnover above the VAT threshold, the Making Tax Digital requirements for VAT will apply.

Answered by

Treasury
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