If a charity operates as a search and rescue organisation, the following changes which come into effect on 1 April 2015, may affect it and the way it handles/incurs VAT.
The 2015 Finance Act will give these organisations “Section 33” status. This means instead of registering and submitting a VAT return to HMRC charities will be able to submit a claim form and recover VAT incurred on certain expenditure ie VAT incurred in connection with making free supplies made to customers or users eg free rescue services. These bodies will therefore be treated in the same way as some local authorities and academy schools.
Who is affected?
Examples of the type of charities affected include:
- operating lifeboat services (coastal and inshore)
- providing air ambulances (planes or helicopters)
- undertaking mountain or cave rescue
- offering search for missing persons by use of sniffer dogs
This issue relates to any charity operating as a search and rescue body, when its main purpose is to carry out search and rescue activities in the UK, and which is ‘coordinated by a relevant authority’ – namely a police force within the meaning of the Police Act 1996, the Maritime and Coastguard agency, the MoD or any other person or body identified by an order made by the treasury.
If this affects your organisation do get in touch, either with your usual Lovewell Blake contact or Liz Hill in our VAT team.