What is the VAT rate on charity shops?

17.5% the same as any shop.

To the best of my knowlede charity shop do not pay vat.They are exempt.

On used stuff zero, but on New stock 17.5% as all shops, except children's clothes they are still zero%

the vat helpline will tell you all u need to know look in phonebook

It should be ZERO, but ours here collect the tax. They shouldn't because the stuff is given to them. When I questioned it I was told they still have "operating costs" which charge them tax. They've just turned into tax collecters for the government. I do know that if you have a coupon "Buy one Get one FREE" you don't pay tax on the FREE one.

Charity shops and sales of goods

Although the sale of donated or bought in goods is a business activity, the precise VAT treatment depends on both the circumstances of the sale and the nature of the goods. ( 5.5 Charity shops and sales of goods
The sale of donated and bought-in goods by charities and their trading subsidiaries is a business activity. The VAT treatment of the income from these sales depends upon the circumstances and the nature of the goods.

5.5.1 How do charities treat income received from the sale or hire of donated goods?

The sale, hire or export of donated goods by a charity or its trading subsidiary (where that subsidiary distributes its profits to the parent charity) is zero-rated. Zero-rating is subject to the following conditions:

the goods must have been donated to the charity or trading subsidiary; and
the goods must be made available to the general public, or to two or more persons who are disabled and/or receiving certain means tested benefits.
Please note that certain goods, such as second-hand toys and electrical equipment, which are prevented under safety legislation from being sold to the general public, will still qualify for zero-rating when sold to scrap merchants, as would the sale of scrap clothing to rag merchants.

Zero-rating will not apply if:

the sale, hire or export of the goods is made as a result of any arrangement between the donor, the charity, the trading subsidiary or the purchaser prior to the goods being made available to the public; or
the goods are used for any other purpose after donation other than being available for sale, hire or export to the general public. So, for example, items of office furniture donated for sale but which are first used by the charity in its offices will not qualify for zero-rating.
5.5.2 What if the charity sells donated goods at a fund-raising event?

If a charity sells donated goods at a qualifying fund-raising event, for example by auction, then the income is zero-rated. Please see paragraph 5.9 and leaflet CWL4 Fund-raising events: exemption for charities and other qualifying bodies.

5.5.3 What if the charity buys in goods to sell?

If a charity buys in goods to sell on it will have to account for VAT at the standard rate on the sale of them, unless they are goods that are zero-rated by statute such as children鈥檚 clothes, books etc. For more information on zero-rated goods please contact our National Advice Service on 0845 010 9000 or refer to Notice 700 The VAT Guide.

Bought-in goods sold at qualifying fund-raising events are exempt from VAT, please see paragraph 5.9 and leaflet CWL4 Fund-raising events: exemption for charities and other qualifying bodies.

Remember, the charity鈥檚 entitlement to reclaim the VAT it has been charged on the purchase of the goods will be affected if it sells them exempt from VAT.

5.5.4 How do VAT registered businesses treat goods donated to a charity for sale?

A VAT registered business can zero-rate the donation of goods to a charity or its trading subsidiary provided that the goods are to be offered for sale.)


If the goods are donated, in most cases they will be zero-rated 鈥?however, this may not apply if your charity makes use of the goods before selling them, or has a prior arrangement with the donor relating to the sale of those goods.
If your charity buys goods to sell on, the income will normally attract standard rate VAT unless the goods are zero-rated by law (children鈥檚 clothes, books etc).
If your charity sells donated or bought-in goods at a qualifying fund-raising event, for example by auction, then the income is zero-rated (but you can鈥檛 claim back VAT on the purchase of bought in goods).

Hope this helps.