Recently we were contacted by a charity that had a contract to deliver advice services. They had approached us for guidance on the VAT position of this income, and we were able to support them in reviewing the contract and deciding whether they should be charging VAT on these services. Luckily, the organisation spoke to us before they started delivery. If not the cost could have meant 17.5% of their contract value needing to be used to pay a VAT liability, plus penalties and surcharges for late VAT registration – which would not have been available as the income would have already been spent. The result – the charity is forced in to liquidation. Do you need help to consider the VAT position of your contracts? For more information please contact us.
