GIFT AID AND VAT

Question

My Parish has adopted  a project and as such will be able to claim the VAT back. They are starting to fundraise and plan to set up a charity to process donations and claim gift aid . Some time ago I read that you cant claim both on the same project (Bob Geldolf  Live aid?).

I have a contact in HMRC but they are most evasive about giving advice  which seems stupid but that 's the way they operate.    Has anyone any experience  of this situation  and can direct me to any specific advice.

Answer 1

Have a look at DavetheClerk's answer here?

https://towncouncillor.com/6778/crowd-funding?show=6778#q6778

Comments

Not entirely clear but  is this right ?
Total cost of project    £100k plus VAT
If PC pays the lot all VAT reclaimable
If third party contributes £50k inclusive of gift aid  only half of the VAT is reclaimable

---

I found this link today together with a reference to VAT act 1994 s33,
https://library.croneri.co.uk/cch_uk/bvr/51-715
Could the more experienced commentators on this board  opine whether this means the VAT is only reclaimable on a PC project for funds that emanate for its own funds please? It seems a reasonable approach but as I say my PC plan to set up a CIO to process public donations and claim gift aid  and I need to be sure of my ground. I find this very complicated
Further advice here  https://www.uptonvillagehall.co.uk/wp-content/uploads/2013/07/VAT_Reclaim.pdf

---

HMRC have simply said
10.1 Recovering VAT incurred on community projects, particularly work to village halls
If you’re a local authority, you may:
•agree with a voluntary group to set up a project fund into which any funds raised locally and any grants received by the voluntary group will be paid
•use this fund to make the purchase or pay for the work on behalf of the voluntary group
But these funds do not belong to you and so you cannot recover the VAT incurred.

End of