Are charities exempt from VAT?

Charities are not automatically exempt from paying VAT on everything they purchase.

However, HM Revenue & Customs (HMRC) provides specific VAT reliefs for qualifying goods and services supplied to charities. These include certain forms of advertising, medical equipment and other purchases made for charitable purposes.

Depending on the nature of the purchase and the conditions of the relevant relief, a supplier may be able to charge VAT at 0% rather than the standard 20% rate.

This is known as VAT Zero Rating, rather than a general VAT exemption.

VAT relief on charity advertising.

Under HMRC guidance, certain advertising services supplied to charities can qualify for zero-rated VAT.

This includes advertising intended to communicate with the public, such as:

• • • Recruitment advertising for paid staff

    • Advertising for volunteers

    • Fundraising and donation campaigns

    • Public awareness campaigns

    • Promotion of charitable activities and services

The relief generally applies to qualifying advertising placed through third-party media, subject to HMRC’s conditions.

Not every form of marketing or advertising is eligible. The VAT treatment depends on the type of service provided, the advertising medium and how the service is supplied.

Does recruitment advertising qualify for VAT relief?

Recruitment advertising can qualify for zero-rated VAT when purchased by an eligible charity.

For example, advertising vacancies through qualifying third-party job boards or publications may fall within HMRC’s charity advertising relief.

However, there is an important distinction between purchasing recruitment advertising and purchasing recruitment services.

Job advertisements may qualify for zero rating, while services such as recruitment consultancy, candidate sourcing and placement fees may be subject to standard-rated VAT.

Where a recruitment package includes several services, the VAT treatment will depend on the nature of the supply and the applicable HMRC rules.

Which charities can qualify?

VAT relief on qualifying advertising is available to organisations that meet HMRC’s definition of a charity.

This can include registered charities in England, Wales, Scotland and Northern Ireland, as well as certain organisations recognised as charitable by HMRC.

An organisation does not necessarily need to be VAT-registered to benefit from the advertising relief.

To qualify, the organisation must have recognised charitable status and the advertising services being purchased must satisfy the conditions for zero rating.

How is VAT relief applied?

VAT relief on qualifying charity advertising is generally applied by the supplier when the service is invoiced.

The charity will normally need to provide appropriate evidence of charitable status and a declaration confirming that the conditions for VAT relief are met.

The supplier is responsible for applying the correct VAT treatment to the services provided.

For further information, charities can refer to HMRC VAT Notice 701/58: Goods or services supplied to charities.

Charity recruitment advertising with Flat Fee Recruiter

Flat Fee Recruiter provides fixed-fee recruitment advertising services for UK charities, helping organisations promote vacancies and reach suitable candidates.

Our Charity Recruitment Advertising package is available from £550 per vacancy, with no VAT charged.

Learn more about charity recruitment advertising.

Check if your charity qualifies for VAT relief.