| Pet charities benefit from VAT ruling |
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| Friday, 14 March 2008 | |
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Animal charities which take in stray cats and dogs have been handed an Easter VAT bonanza. A VAT tribunal has ruled that abandoned animals handed into pet rescue centres and charities by police or members of the public are zero rated for VAT when re-homed and sold to new owners. HM Revenue & Customs had previously ruled that only animals 'donated' to such charities by their original owners could be zero-rated. "This is a common-sense decision which will have a major impact on hundreds of animal charities," said PKF VAT Partner Gerry Myton. "These well-meaning charities can now make a claim for previously overpaid VAT and there may be the opportunity to go back many years when submitting claims for overpayment," he added. Subject to certain conditions the sale of donated goods by a charity is zero-rated and the view of HMRC was that only animals given to the home by their original owners could be regarded as 'donated' within the terms of the legislation. The tribunal found that the charity involved in the appeal, the Gablesfarm Dogs and Cats Home in Plymouth, had taken steps to return genuinely lost animals to their owners and those it offered for re-homing had been deliberately abandoned. In these circumstances the animals given to the charity by the local authority, the police and members of the public were donated and therefore zero-rated when sold. HMRC is not appealing against the tribunal's decision and accepts that charities selling animals in similar circumstances should zero-rate their supplies. Myton said that charities that have accounted for and paid VAT on sales of animals that are now considered to be zero-rated may submit claims for overpaid tax to their Local Business Advice Centre. All claims are subject to the relevant time limits and unjust enrichment provisions. Related articles
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