In the Charities and Not for Profit Sector, VAT only applies to business activities.

It is often a challenge to work out whether a particular course of conduct is classified as a business or non-business activity.

• If it is a business activity, is it subject to VAT or exempt?
• What are the conditions for zero-rated status to apply?
• How much VAT can be reclaimed on purchases?
• Certain activities by charities are zero rated? But which ones?
• Some activities by non-profit-making bodies are exempt from VAT. What is the situation if there are profits?
• What are the rules applying to construction projects (see Construction)?