Tag Archives: vat-free

Education – New funding rules impact on VAT

By Marcus Ward 9 December 2018

The government has announced it will amend the VAT law from 1 August 2019 to ensure continuity of VAT treatment for English Higher Education (HE) providers under the Higher Education and Research Act 2017. The change in legislation applies to English HE providers who register with the Office for Students (OfS) in the Approved (fee cap) category.

Background

VAT exemption currently applies to UK universities and their colleges, institutions conducted by higher education corporations (HECs) and other institutions that are designated as eligible to receive support from central funding.

There are changes to the way that HE providers are funded by the OfS from the start of the 2019 to 2020 academic year. These changes require an amendment to be made to the statutory definition of an eligible body in Note 1(c) of Group 6 of Schedule 9 to the VAT Act 1994.

Paragraph 4.1 of VAT Notice 701/30 (Education and Vocational training) explains that an eligible body includes ‘a school, university, sixth form college, tertiary college or further education (FE) college or other centrally funded higher or FE institution’ (defined as such under the Education Acts).

Revised VAT treatment

Note 1(c) to Group 6 of Schedule 9 to the VAT Act 1994 is being amended in respect of HE institutions in England (only).

The exemptions that relate to FE will be unaffected, although some providers of FE that also provide HE may register with the OfS in the Approved (fee cap) category.

Note 1(c) currently refers to bodies that fall within subsections 91(5)(b) and (c) of the Further and Higher Education Act (FHEA) 1992, but subsection 91(5)(c) of FHEA 1992 will no longer apply to England once the Higher Education and Research Act 2017 fully commences.

Sub-section 91(5)(b) of FHEA 1992 will be amended so that this only applies to institutions in Wales.

In order to be bodies entitled to exempt their supplies, those English HE providers who are currently exempt by virtue of being HECs or designated institutions will in future need to be registered by the OfS in the Approved (fee cap) category.

All English HE providers who will become registered in the Approved (fee cap) category will also become entitled to exempt their supplies in future.

The overall impact of the change is to ensure that those HE providers that are currently eligible to receive central funding can continue to exempt their supplies of education.

institutions which currently fall within section 91 FHEA 1992 will have to show that they are registered with the Office for Students in order to exempt their services

HEMore details are available in VAT Information Sheet 08/18

See our education offering here

VAT: EC adopts short term fixes

By Marcus Ward 5 December 2018

The European Council (EC) will adopt short-term fixes to the current VAT system.

The EC agreed three short legislative acts aimed at adjusting some of the EU’s VAT rules in order to fix four specific issues pending the introduction of a new VAT system. These relate to:

call-off stock. The text provides for a simplified and uniform treatment for call-off stock arrangements, where a vendor transfers stock to a warehouse at the disposal of a known acquirer in another member state
the VAT identification number. To benefit from a VAT free treatment for the intra-EU supply of goods, the identification number of the customer will become an additional condition
chain transactions. To enhance legal certainty in determining the VAT treatment of chain transactions, the texts establish uniform criteria
proof of intra-EU supply. A common framework is established for the documentary evidence required to claim a VAT exemption for intra-EU supplies

These adjustments are due to apply from 1 January 2020.

In parallel, discussions are ongoing on a definitive VAT system to replace the current ‘transitional’ VAT arrangements, applied since 1993. Pending introduction of the new system, the four short-term quick fixes are proposed.

EC clamp down on yacht and aircraft VAT abuse

By Marcus Ward 8 November 2018

The European Commission (EC) has stepped up its agenda to tackle tax avoidance in the yacht and aircraft sectors by implementing infringement proceedings on tax breaks being applied in the pleasure craft industries of the Isle of Man. These provisions can generate major distortions of competition, as highlighted by last year’s ‘Paradise Papers’ leaks.

The EC has sent a formal notice to the UK in respect of the Isle of Man’s abusive VAT practices relating to sales and leasing of aircraft.

Background

Input tax is only deductible when it relates to business use of an asset. The EC says that supplies of aircraft, including leasing services, intended expressly for private use, should not be effectively VAT free. The EC believes that the UK has not taken sufficient action against abusive VAT practices in the Isle of Man on supplies and leasing of aircraft. This perceived abuse is facilitated by UK national rules which do not comply with EU law.

Broadly, arrangements are made such that a (seemingly) artificial leasing businesses is put in place and through which individuals rent their own jets from themselves. The most high-profile example of this structure is one used by Lewis Hamilton for his private jet.

Features of such arrangements are said to be:

Users of the scheme recover 100% of import VAT when it appears that an adjustment should be made for the proportion of the amount of private use intended for the aircraft
VAT should be declared and paid to any European Member States whose airports are used for leisure flights.
The leasing businesses set up for jets usually appear to be a letterbox companies with no real economic purpose. Consequently, it is unlikely that such entities should be entitled to reclaim VAT from the Isle of Man.

It is understood that the Isle of Man government has called in the HMRC which will review of 231 tax refunds issued to private jet owners since 2011 valued at circa $1billion of VAT.

Representatives of the EC are due to visit the Isle of Man this month. Similar action is being taken against Italy in respect of the lease of yachts and excise duty rates for motor boats.

What happens next?

The UK now has two months to respond to the arguments put forward by the EC regarding VAT on aircraft. If the UK authorities do not act within those two months, the EC will send a reasoned opinion. If the UK does not act within the next two months on the reasoned opinion the EC may bring the case before the Court of Justice of the EU.

Pierre Moscovici, the Commissioner for Economic and Financial Affairs, Taxation and Customs Union, said: “It’s simply not fair that some individuals and companies can get away with not paying the correct amount of VAT on products like yachts and aircraft. Favourable tax treatment for private boats and aircraft is clearly at odds with our commonly agreed tax rules and heavily distorts competition in the maritime and aviation sectors. With this in mind, the Commission is taking action to clamp down on rules that try to circumvent EU law in these areas.”

For More Information

On the general infringements procedure, MEMO/12/12.

On the EU infringements procedure.

Commentary

We do not design, sell or advocate such schemes. Our view is that these and similar structures are, quite rightly, open to attack from the relevant authorities. They do not reflect well on those that put these structures in place nor those that benefit from them. Using a leasing scheme as such is not necessarily abusive. However, if one takes the other elements in the targeted schemes into consideration, such as the absence in motive of setting up those companies and the fact that those companies do not seem to have any substance, it is likely to lead to the action we see from the EC and its view that these schemes are abusive.

How Brexit will impact on these and similar situations remains to be seen.

VAT: Are sales from Student Union shops exempt?

By Marcus Ward 5 November 2018

Latest from the courts

In the Upper Tribunal (UT) case of Loughborough Students’ Union (LSU) the issue was whether sales of certain goods from Student Union shops were exempt as being closely related to education. This case is a practical issue considering the exemption I set out recently here

The two issues before the UT were:

were the shops eligible bodies, and
were the sales closely related to education supplies?

Background

The appeal by LSU was against a decision of the First-Tier Tribunal (FTT) dismissing its appeal against HMRC’s decision to deny its claim for repayment of output tax in respect of sales of; stationery, art materials and other items from the shops which LSU operates on campus.

Legislation

The legislation (where relevant to this case) is:

VAT Act 1994, Group 6, Item No 1, item 4

1 The provision by an eligible body of (a) education; …

4 The supply of any goods or services (other than examination services) which are closely related to a supply of a description falling within item 1 (the principal supply) by or to the eligible body making the principal supply…

Decision

Not surprisingly, the appeal was dismissed. because even if LSU was an eligible body (which the judge was doubtful about) the exemption only applied to an eligible body which itself provided education, which clearly LSU did not. Consequently, the supplies for which exemption was sought were not closely related to any principal supply. Further, the judge was not persuaded that even if the supplies were closely connected to education, that they were essential (as required) to education. Food, newspapers and household goods for eg, are “ends in themselves” and not ancillary to education; the education provided by the University would be just as good if the students did not buy these items from the LSU shops.

Commentary

The appeal seems to have been a long-shot and predictably, it failed. Care must always be taken with the VAT treatment of goods and services closely connected to education. This is an area I am often asked for an opinion on by schools, academies, colleges and universities and there is not one single one-size fits all answer.

Our offering to education bodies here

Combined Nomenclature – 2019 version published

By Marcus Ward 5 November 2018

The European Commission (EC) has published the latest version of the Combined Nomenclature (CN) applicable from 1 January 2019.

The CN forms the basis for the declaration of goods

at importation or exportation or
when subject to intra-Union trade statistics

This determines which rate of Customs Duty applies and how the goods are treated for statistical purposes. The CN is a vital working tool for business and the Member States’ Customs administrations.

The CN is updated every year and is published as a Commission Implementing Regulation in the Official Journal of the European Union.

The latest version is now available as Commission Implementing Regulation (EU) 2018/1602 in EU Official Journal L 273 on 31 October 2018 and applies from 1 January 2019.

Businesses which import, and/or export need to be aware of any changes as they could affect the amount of Customs Duty payable. We recommend that such a business’s import/export agent or carrier should be contacted in the first instance.

VAT e-books to be reduced rated?

By Marcus Ward 10 October 2018

The EC will put forward a proposal to permit EU Member States to introduce a reduced rate for the supply of e-books to bring them into line with traditional books (which, uniquely, are zero rated in the UK). Details of the latest court decision and reasoning here and an ECJ decision on the matter here

What are e-books for this proposal?

e-book is short for “electronic book.” It is a digital publication that can be read on a computer, e-reader, or other electronic device. e-books are available in several different file formats. There are many types of e-book formats, all of which support text, images, chapters, and page markers . An e-book may be a novel, magazine, newspaper, or other publication. However, the electronic versions of magazines and newspapers are often called “digital editions” to differentiate them from electronic books. It is likely that digital editions will be included in the proposed reduce rate proposal.

Timeframe

It is likely that the proposal will be adopted quite quickly once the formalities have been completed, so watch this space.

HMRC stance

Previous cases have underlined HMRC’s position that they view traditional physical books and online supplies as two different supplies, even if the content is similar, or even identical. It will be interesting to see how they react to the EC’s adoption of these proposals, especially in the current political environment.

Action

If you, or your clients, supply e-books, it is important to monitor this position. Failure to respond to any changes may mean too much VAT being accounted for and an EU-wide commercial competitive disadvantage. We will report on the latest on e-books as soon as possible any final decisions are made.

VAT and Customs Duty – Impact of No-Deal Brexit

By Marcus Ward 4 October 2018

HMRC has published guidance on the likely implications of a No-Deal Brexit. The guidance states that it is “unlikely” that the UK will leave the EU without a deal, however, in the recent political climate, observers comment that a No-Deal scenario is increasingly likely (to put it conservatively). Consequently, business must be in a position to deal with a No-Deal from 29 March 2019. The guidance may be summarised as follows:

Current position

VAT is payable by businesses when they bring goods into the UK. There are different rules depending on whether the goods are acquisitions (EU) or imports (non-EU)
no requirement to pay VAT when goods from the EU arrive in the UK. A business acquiring goods from the EU accounts for VAT on the goods in its next VAT return, offsetting input tax against output tax (acquisition tax, a simple “reverse charge” bookkeeping exercise)
no Customs Duty on goods moving between EU Member States
goods that are exported by UK businesses to non-EU countries and EU businesses are UK VAT free
goods that are supplied by UK businesses to EU consumers have either UK or EU VAT charged, subject to distance selling thresholds
for services the place of supply (POS) rules determine the country in which a business needs to charge VAT

From 29 March 2019 with a No-Deal Brexit

the UK will continue to have a VAT system
the government will attempt to keep VAT procedures as close as possible to the current systems
acquisitions from the EU will become imports
imported goods from the EU (or elsewhere) will be subject to VAT deferment
Customs and Excise Duty formalities will now be required for EU imports
UK businesses supplying digital services are likely to be required to register for the one stop shop (MOSS) in a country within the EU
the rate of input recovery for providers of financial services (FS) and insurance may be improved
Low Value Consignment Relief (LVCR) is likely to be abolished for goods entering the UK as parcels, whether from within or outside the EU.
no requirement to comply with existing Distance Selling rules (exports of goods to individuals will be UK VAT free)
EC Sales Lists will not be required
Businesses need to take steps to examine their import and export procedures (!)

I have paraphrased some of the guidance for clarity and technical accuracy and the above points are not direct quotes.

Commentary

The apparent good news is that UK businesses importing goods from the EU will not have to pay VAT on the date that the goods enter the UK, but rather, will be able to account for the VAT later via a deferment system, presumably similar to the one in place for current non-EU imports. Helpful for cashflow, but an unwanted additional complexity, especially for small businesses. A concern is that HMRC cannot deal with the documentation requirements even before Brexit see here

A big negative for UK business is the fact that customs declarations and the payment of any other duties will now be required for imports from the EU – in the same way as currently applies when importing goods from outside the EU. Consequently, for goods entering the UK from the EU

an import declaration will be required
customs checks may be carried out
customs duties must be paid.

This is an additional complication and a cost to a business which is currently able to bring goods into the UK from the EU without any of these declarations, payments or inspections. This is likely to lead to additional delays at the border and will certainly increase administration and costs. Whether this will encourage UK businesses to purchase more goods from UK suppliers remains to be seen. It is worth mentioning that HMRC has also said that UK importers need to take steps apply for an Economic Operator Registration and Identification Number (EORI) for businesses which do not already have one. Details here

Brexit may provide a ray of sunshine for FS and insurance suppliers (well for VAT anyway, the commercial impact may be somewhat different). In the event of a No-Deal Brexit, for UK FS and insurance providers, input VAT deduction rules in respect of services to the EU may be changed. Although no details are provided, it appears to me that input tax attributable to these supplies will be treated similarly to those currently provided to recipients outside the EU. Which will broadly mean that those supplies which would be exempt if provided in the UK would provide full input tax recovery if the recipient belongs anywhere outside the UK. This will be very good news for The City.

LVCR currently relieves goods worth under £15 which come into the UK from outside the EU from UK VAT. Its abolition means that all goods entering the UK as parcels sent by overseas businesses will be liable for VAT (unless they are zero-rated from VAT) if the value is under £15. An unwelcome and apparently unnecessary change.

Generally

It is prudent for businesses to consider how their imported goods will be classified and how they will submit import declarations in the result of a No-Deal Brexit. HMRC suggests that importers may want to consider looking at suitable commercial software and, or, engaging a commercial customs broker, freight forwarder or logistics provider. We advise contacting the relevant providers sooner, rather than later, to establish what you, or your client’s business may require. Of course, all of the above will increase the potential of a business receiving penalties and interest if it gets it wrong.

If you would like to discuss any of the above, please contact me, or a member of my team. Readers that know me, may admire my restraint in commenting, politically, on Brexit…

As I often find myself saying recently – good luck everybody.

VAT DIY Housebuilders’ Scheme Top 10 Tips

By Marcus Ward 14 September 2018

If you build your own home, there is a scheme available which permits you to recover certain VAT incurred on the construction. This puts a person who constructs their own home on equal footing with commercial housebuilders. There is no need to be VAT registered in order to make the claim. As always with VAT, there are traps and deadlines, so here I have set out the Top Ten Tips.

An in-depth article on the DIY Housebuilders’ Scheme here

The following are bullet points to bear in mind if you are building your own house, or advising someone who is:

Understand HMRC definitions early in your planning

Budgeting plays an important part in any building project. Whether VAT you incur may be reclaimed is an important element. In order to establish this, it is essential that your plans meet the definitions for ‘new residential dwelling’ or ‘qualifying conversion’. This will help ensure that your planning application provides the best position for a successful claim. One point to bear in mind, and which I have found often produces difficulties, is the requirement for the development to be capable of separate (from an existing property) disposal.

Do I have to live in the property when complete?

You are permitted to build the property for another relative to live in. The key point is that it will become someone’s home and not sold or rented to a third party. Therefore, you can complete the build and obtain invoices in your name, even if the property is for your elderly mother to live in. However, it is not usually possible to claim on a granny annexe built in your garden (as above, they are usually not capable of being disposed of independently to the house).

Contractors

Despite the name of the scheme, you are able to use contractors to undertake the work for you. The only difference here will be the VAT rate on their services will vary depending on the nature of the works and materials provided.

What can you claim?

A valid claim can be made on any building materials you purchase and use on the build project. Also, services of conversion charged at the reduced rate can be recovered. However, input tax on professional services such as architect’s fees cannot be recovered.

Get the VAT rate right

It is crucial to receive goods and services at the correct rate of VAT. Services provided on a new construction of a new dwelling will qualify for the zero rate, whereas the reduced rate of 5% will apply for qualifying conversions. If your contractor has charged you 20% where the reduced rate should have been applied, HMRC refuse to refund the VAT and will advise you go back to your supplier to get the error corrected. This is sometimes a problem if your contractor has gone ‘bust’ in the meantime or becomes belligerent. Best to agree the correct VAT treatment up front.

Aid your cash flow

If you wish to purchase goods yourself, it will be beneficial to ask your contractor to buy the goods and combine the value of these with his services of construction. I this way, standard rated goods become zero rated in a new build. If you incur the VAT on goods, you will have to wait until the end of the project to claim it from HMRC.

Claim on time

The claim form must be submitted within three months of completion of the build, usually this is when the certificate of practical completion is issued, or the building is inhabited. although it can be earlier if the certificate is delayed.

Use the right form

HMRC publish the forms on their website

Using the correct forms will help avoid delays and errors.

Send everything Recorded Delivery

You are required to send original invoices with the claim. Therefore, take copies of all documents and send the claim by recorded delivery. Unfortunately, experience insists that documents are lost…

Seek Advice

If you are in any doubt, please contact me. Mistakes can be costly, and you only get one chance to make the claim. Oh, and don’t forget that this is VAT, so any errors in a claim may be liable to penalties.

VAT – When is chocolate not chocolate (and when is it)?

By Marcus Ward 4 September 2018

Latest from the courts

In the First Tier Tribunal (FTT) case of Kinnerton Confectionery Ltd the issue was whether a product could be zero rated as a cooking ingredient, or treated as standard rated confectionary (a “traditional” bar of chocolate.)

Background

The product in question was an allergen free “Luxury Dark Chocolate” bar. It was argued by the appellant that it was sold as a cooking ingredient and consequently was zero rated via The Value Added Tax Act 1994, section 30(2) Schedule 8. HMRC decided that it was confectionary, notwithstanding that it could be used as a cooking ingredient.

Decision

The judge stated that what was crucial was how the chocolate bar was held out for sale. In deciding that the chocolate bar was confectionary the following facts were persuasive:

the Bar was held out for sale in supermarkets alongside other confectionery items and not alongside baking products
it was sometimes sold together with an Easter egg as a single item of confectionery
although the front of the wrapper included the words “delicious for cakes and desserts”, it contained no explicit statement that the Bar was “cooking chocolate” or “for cooking”
the back of the wrapper made no reference to cooking. It also stated that the portion size was one-quarter of a bar. Portion sizes are indicative of confectionery, not cooking chocolate
Kinnerton’s website positioned the Bar next to confectionery items, and did not say that it was cooking chocolate, or that it could be used for cooking
neither the wrapper nor Kinnerton’s website contained any recipes, or any indication of where recipes could be found
the Kinnerton brand is known for its confectionery, not for its baking products. All other items sold by Kinnerton are confectionery, and the brand is reflected in the company’s name
the single advertisement provided as evidence positioned the Bar next to confectionery Items, and did not say that the Bar was “cooking chocolate”; instead it made the more limited statement that it was “ideal for cooking”
consumers generally saw the Bar as eating chocolate which could also be used for cooking

Commentary

Clearly, the FTT decided that consumers would view the chocolate bar as… a chocolate bar, so the outcome was hardly surprising. This case demonstrates the importance of packaging and advertising on the VAT liability of goods. Care should be taken with any new product and it is usually worthwhile reviewing existing products. This is specifically applicable to food products as the legislation is muddled and confusing as a result of previous case law. This extends to products such as pet food/animal feedstuffs which while containing identical contents have different VAT treatment solely dependent on how they are held out for sale. And we won’t even mention Jaffa Cakes (oops, too late).

VAT – Charity Fundraising Exemption

By Marcus Ward 17 August 2018

Avoid adding VAT to fundraising income

There are very few VAT reliefs for charities (and it may be argued that an exemption is more than a burden than a relief) but there is an exemption for a charity which qualifies as undertaking a one-off fundraising event. The criteria are quite restrictive, and it is important that the correct treatment is applied. Furthermore, it may be in a charity’s interest to avoid the exemption if there is a lot of input tax attributable to the event, say; venue hire, entertainment, catering etc.

A qualifying event means that a charity (or its trading subsidiary) does not charge VAT on money paid for admittance to that event.

What is covered?

In order to be exempt, the event must be a one-off fundraising event which is “any event organised and promoted primarily to raise funds (monetary or otherwise) for a charity”. Consequently, we always advise clients to make it clear on tickets and advertising material (including online) that the event is for raiding funds and to use a statement; “all profits will be used to support the charitable aims of XYZ” or similar.

HMRC say that an event is an incident with an outcome or a result. This means that activities of a semi-regular or continuous nature, such as the operation of a shop or bar, cannot therefore be an event.

The following are examples of the kind of event which qualify:

ball, dinner dance, disco or barn dance
performance – concert, stage production and any other event which has a paying audience
showing of a film
fete, fair or festival
horticultural show
exhibition: art, history or science
bazaar, jumble sale, car boot sale, or good-as-new sale
sporting participation (including spectators): sponsored walk or swim
sporting performance
game of skill, contest or a quiz
participation in an endurance event
fireworks display
dinner, lunch or barbecue
an auction of bought in goods

Tip

Often there may be an auction of donated goods at a fundraising event. There is a specific and helpful relief for such sales. The sale of donated goods is zero rated which means any attributable input tax is recoverable. Consequently, if both exempt and zero rated supplies are made it is possible to apportion input tax to a charity’s benefit. Zero rating may also apply to sales such as: food (not catering) printed matter and children’s clothing

Limit to the number of events held

Eligible events are restricted to 15 events of the same kind in a charity’s financial year at any one location. The restriction prevents distortion of competition with other suppliers of similar events which do not benefit from the exemption. If a charity holds 16 or more events of the same kind at the same location during its financial year none of the events will qualify for exemption. However, the 15-event limit does not apply to fundraising events where the gross takings from all similar events, such as coffee mornings, are no more than £1,000 per week.

Clearly, the number of events needs to be monitored and planning will therefore be available should exemption be desired (or avoided as the relevant figures dictate).

What is a charity?

This seems to be a straightforward question in most cases, but can cause difficulties, so it is worthwhile looking at the VAT rules here.

Bodies have charitable status when they are:

registered, excepted or exempted from registration with the Charity Commission in England and Wales
registered by the Office of the Scottish Charity Regulator (OSCR) in Scotland
invited to register by The Charity Commission for Northern Ireland which are treated by HMRC as charitable.

Not all non-profit making organisations are charities. The term ‘charity’ has no precise definition in any law. Its scope has been determined by case law. It is therefore necessary to establish whether an organisation is a charity using the following guidelines:

charities are non-profit distributing bodies established to advance education, advance religion, relieve poverty, sickness or infirmity or carry out certain other activities beneficial to the community
in England and Wales charities must normally register with Charity Commission- some very small charities don’t need to register with Charity Commission, there are also some other special cases where particular bodies do not need to register, if there is uncertainty regarding a position see the Charity Commission website
in Scotland all charities must be registered with the OSCR – HMRC decides whether bodies in Northern Ireland are eligible.

Trading arm

It is worth noting that HMRC also accept that a body corporate which is wholly owned by a charity and whose profits are payable to a charity, will qualify and may therefore may apply the VAT exemption to fundraising events. This means that a charity’s own trading company can hold exempt fundraising events on behalf of the charity.

Further/alternative planning

If sales are not exempt as a fundraising event, there is a way to avoid VAT being chargeable on all income received. It is open to a charity to set a basic minimum charge which will be standard rated, and to invite those attending the event to supplement this with a voluntary donation.

The extra contributions will be outside the scope of VAT (not exempt) if all the following conditions are met:

it is clearly stated on all publicity material, including tickets, that anyone paying only the minimum charge will be admitted without further payment
the extra payment does not give any particular benefit (for example, admission to a better position in the stadium or auditorium)
the extent of further contributions is ultimately left to ticket holders to decide, even if the organiser indicates a desired level of donation
for film or theatre performances, concerts, sporting fixtures etc, the minimum charge is not less than the usual price of the particular seats at a normal commercial event of the same type
for dances, and similar functions, the minimum total sum upon which the organisers are liable to account for VAT is not less than their total costs incurred in arranging the event

It should be noted that any other donations collected at an event are also outside the scope of VAT.

Partial exemption

A charity must recognise the impact of making exempt supplies (as well as carrying out non-business activity). These undertakings will have an impact on the amount of input tax a charity is able to recover. Details here

Summary

We find that charities are often confused about the rules and consequently fail to take advantage of the VAT position. This also extends to school academies which are all charities. It is usually worthwhile for charities to carry out a VAT review of its activities as quite often VAT savings can be identified.