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Charity VAT

  • Member PM.Dip
  • Practice Licence
  • 36 posts
  • # 119856


I am after some advice please.

I have Been asked a question about a charity and VAT.

The charity is a beekeeping association SWBKA which is a division of a larger beekeeping association EBKA

A member  of SWBKA purchases a large amount of liquid winter feed for bees.

SWBKA  then distributes this on behalf of the member who has purchased it. It is distributed through several sub divisions of EBKA and SWBKA collects the money on the members behalf in the charities bank account. At no point do any of the divisions own the liquid feed, it belongs to the member who has purchased it. 

Once all the feed has been distributed and the money collected, the charity then passes on the money to the member via a bank transaction.

It has been asked that if this distribution and transfer of the funds would cause a situation with VAT

1. would this arrangement be classed as something that when making the charity go over the VAT threshold the charity would then have to register for VAT, even though the sale and collection of money are nothing to do with the charity as they are only holding the money and passing it on?

2. should this be entered as sales and purchases? again, even though the charity is just collecting and passing the money on.

Thank you

Edited at 22 Jun 2021 06:46 PM GMT

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