Do charities have to pay VAT – are they not exempt from tax?
Contrary to popular belief charities do not receive much in the way of preferential VAT treatment. The principal relief in the construction sphere is for the zero-rating of various construction services related to ‘relevant charitable purpose’ buildings which must be used for non-business purposes or as a village hall or similar such establishment. The criteria for qualification are involved and frequent VAT tribunals occur in this area.
