VAT for charities

[babyOcho]

A local school is VAT registered and is advertising in my local NCT magazine.

I am just doing the invoicing for this advertising and the contact at the school has asked me to reissue the invoice without the VAT as they are a registered charity.

Is this the case? Or should they be claiming VAT back on their side?

I must admit, I dont understand any of this.

Any help or pointers appreciated.

You can be both a registered company and a registered charity, that much I do know. When I worked for an orchestra that was both, we still had to pay the VAT and claim it back.

If you are registered for VAT, then you must add VAT to all your invoices, it doesn't matter whether you are supplying a school, a charity, a company or whatever.

(have just seen that 'you' are acting as an agent of the NCT here, which is itself a company, a charity and registered for VAT so my response needs qualification)

If you are registered for VAT, then you must add VAT to all your invoices for taxable supplies, it doesn't matter whether you are supplying a school, a charity, a company or whatever.

If the transaction does not fall within the scope of your VAT registration (i.e. it is part of your charitable activities), then you should not charge VAT (and you will be unable to reclaim any VAT on related supplies to you).

I suspect that advertising in the magazine is counted as a trading activity, rather than a charitable activity, which is why you are adding VAT. If you are in doubt, you should check with the central finance function of the NCT.

it used to be the case many many years ago that charities didn't have to pay VAT. Sadly nowadays, everyone has to pay VAT on goods/services from a VAT registered company, and then can claim it back if they are VAT registered themselves.
So no, don't issue an invoice without VAT, it's up to them to reclaim it. Otherwise you are liable for that VAT yourself, as it's your invoice.

(must stop posting without thinking through)

In fact, you should definitely consult your administration manuals and contact the finance department of the NCT, because I would expect them to raise VAT invoices centrally: either that or have an absolutely watertight procedure which would mean you didn't need to ask this question!

What happened last time? I'm guessing that this won't be the first time that a school advertised with you?

It's the first time they have advertised with us and I've only just taken over the role myself.

Will check with the central NCT people.

BTW I am doing this at the local branch level.