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A new VAT relief to encourage businesses to donate everyday items to charity was announced as part of the tax administration and maintenance day announcements.
Currently firms do not pay VAT on any goods they donate which are then sold on such as clothes hygiene supplies and cleaning products. However if these goods are instead distributed free of charge to those in need VAT must be paid.
The Treasury will launch a consultation on the proposed relief in July. Donations that could be in scope could include hygiene items (soap toothpaste toothbrushes shower gel toilet rolls) second hand items from hotels (such as sheets kettles) and cleaning supplies – including laundry detergent.
Goods donated for charities to use such as new IT equipment will not be covered to prevent VAT avoidance - for...
