RNLI ? diesel and vat??

[knewboater]

Just a thought can anyone tell me why the RNLI pay £2m a year vat? and will they have to pay the extra tax for diesel?

 

[rwakeham]

In general charities do not make taxable supplies - ie they do not sell anything that attracts VAT - therefore VAT tends to be a cost to them. Often a charity will set their shops (if they have them) in a separate legal entity and charge and recover VAT. The same thing applies to insurance companies.

 

[EdWingfield]

They make bulk purchases. eg. 200 caterpillar engines to fit new and refurbed boats. Costa lotta.

 

[MarkJohnson12345]

Not sure about charities, but if I buy those engines for business purposes, I reclaim the VAT.

Thus VAT tends to assist me. I add VAT to sales therefore no cost again.

Only Jo public ends up paying VAT and is unable to reclaim.

But maybe charities are different??

From my business point of view, VAT helps and is a discipline to keeps my books up to date.

(Warped I know!!!)

/forums/images/graemlins/confused.gif

 

[knewboater]

Thanks for that, find it strange that noone knows if they will pay the extra for diesel! Not that you may be interested of course.

 

[derekh]

I rent property to two different charities and I have to charge vat, they have to pay vat. as for the post on vat-in and vat-out on purchases and sales, don't forget the vat man gets 17.5% of your profit.

 

[duncanmack]

Re the extra duty on diesel.

They can reclaim all the duty on the fuel they use.

So can any club or dive "safety boat" on diesel and petrol.

 

[TrueBlue]

Without getting off my butt to check - as it were, aren't charities exempt from VAT. If so that means they can't reclaim it. Hence the £2m cost.

It would be better if they were zero rated, then they could reclaim, but that's not the way the law is.

 

[Peter_Chennell]

Irrecoverable VAT - the RNLI, like all other charities, does not trade and so cannot reclaim its VAT costs. Whilst we do receive some zero-rating i.e. VAT is not charged, in relation to lifeboats and station construction, there is still some £2.2m of VAT costs that cannot be reclaimed for costs that do not relate to the lifeboats themselves. These include, for example, Lifeboat station maintenance, Crew training, General crew and station costs, Prevention and education, Fundraising, and Support costs

The RNLI is currently campaigning to recover these costs and any help is most welcome.

We have yet to find out whether we can continue to use red diesel, since we should not be classed as 'private' boat users. However, if we are then we are able to recover any hydrocarbon duty paid so this should not be an issue.

 

[David2452]

[ QUOTE ]
don't forget the vat man gets 17.5% of your profit.

[/ QUOTE ]

Shouldn't that be "of your turnover"? (assuming all supplies are standard rate of course