Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Charity definition

What does Charity mean? In practice, a charity is an organisation established solely for charitable purposes to deliver public benefit, with assets held for those purposes and supervised by the courts and charity regulators. Common forms include a trust, unincorporated association or company limited by guarantee (including CIO/SCIO). Surpluses cannot be distributed to members; funds must be applied to the purposes. Political activity is permitted only as ancillary. Status determines regulatory duties and eligibility for charity tax reliefs. England and Wales: Charities Act 2011, s 1, defines a charity as an institution established for charitable purposes only and subject to High Court control;...

UK VAT for Charities: Business and Fundraising Activities, Primary/Non-Primary Trading, Taxable, Zero-Rated and Exempt Supplies, and Registration, Notification and Deregistration Obligations

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Practice notes

There is no blanket relief for charities from VAT on the supplies they make. Likewise, they get no relief on supplies they receive. Nevertheless, zero rating can apply in some circumstances, and certain exemptions and concessions may attach to supplies made by charities. Charities may undertake both primary and non‑primary purpose trading. In the former, trading occurs in furtherance of their charitable aims; in the latter, activities are used as an ancillary means of generating funds. Charities are not allowed to conduct non‑primary trading on any significant scale unless they establish subsidiary trading companies. If they proceed in that way, they will forfeit any VAT benefits available to the charity unless both the charity and the subsidiaries register for VAT and can be included within a VAT group. It is crucial to distinguish between ‘trading’ and ‘business’. A charity’s trading will typically be treated as business; however, for VAT, a charity’s usual fundraising activities can also be regarded as VATable business. Although activity supports the charitable purpose, it will be viewed as falling within scope of business for VAT. The position mirrors the principle that charitable status does not disapply VAT...

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Web page updated on 22/05/2026

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