Crowe UK outlines five key VAT and tax risks and opportunities for hospice charities, covering corporation tax on non‑primary purpose trading, Gift Aid compliance, fundraising event exemptions, building project VAT relief, and upcoming investment rules effective April 2026. The article highlights practical compliance steps and recent court rulings that may affect hospice operations.
The VATfaqs digest
Global VAT news, delivered Tuesday and Thursday. Free, curated from 50+ official sources, no spam.
No spam · Unsubscribe any time
Cumbria Crack · about 14 hours ago
The UK government’s Great British Summer Savings initiative introduces a temporary VAT reduction from 20% to 5% on certain children’s meals and family-focused activities from 25 June to 1 September 2026. Businesses must identify qualifying supplies, review pricing, adjust bundled offers, and update booking and accounting systems to manage mixed VAT treatments and potential advance‑booking adjustments.
Bournemouth Echo · about 23 hours ago
HMRC has confirmed that VAT‑registered companies in Dorset can donate goods to registered charities without incurring VAT, provided the goods are used to support people in need or deliver charitable services. This removes a barrier that previously required businesses to pay VAT on donated goods. Businesses should keep accurate records of donated items, especially high‑value goods.
Marcus Ward · 5 days ago
HMRC has updated Notice 742A to clarify the treatment of opted land and buildings, including the requirement to account for output tax on assets remaining on hand at the point of VAT registration cancellation and the removal of a temporary change to the notification time limit. The notice also outlines whether optors need HMRC permission before exercising the option and how to notify HMRC of the decision.
Irish News · 6 days ago
The UK Government has announced a temporary VAT cut for Northern Ireland hospitality, reducing the rate on tickets for theme parks, zoos and museums from 20% to 5% for the summer holidays of 2026. The move is part of a broader push to align Northern Ireland’s rates with the Republic of Ireland, where food and hospitality services will fall to 9% later this year. The decision is seen as a proof point for differentiated VAT policy to support the sector.
Greater Birmingham Chambers of Commerce · 16 days ago
The UK Chancellor announced temporary VAT cuts from 20% to 5% on family attractions during school holidays, effective from the end of June to 1 September 2026. Additional measures include free bus journeys for under‑16s in England in August, a 12‑month HGV road tax holiday, and a one‑third reduction in red diesel duty until the end of 2026. Business leaders argue the cuts are insufficient to support hospitality and other sectors.
Museums Association · 16 days ago
The UK government has introduced a temporary 5% VAT rate on admission to certain family attractions, effective from 25 June to 1 September 2026, replacing the standard 20% rate. The cut covers museums, planetariums, heritage sites, nature reserves, botanical gardens, children’s meals and performance‑venue tickets marketed for children, but excludes seasonal passes beyond 1 September unless priced similarly to day tickets. Charities already exempt from VAT do not benefit unless they operate through a VAT‑registered trading subsidiary.
Put your brand alongside trusted tax-tech intelligence across 150+ countries.
Key Takeaways
From April 2026, hospices must demonstrate each investment is held solely for the charity’s benefit to qualify as an approved charitable investment; otherwise, investment income may be taxable.
If a hospice’s building project costs exceed £250,000 plus VAT (expected to rise to £600,000), the building’s use must be monitored for ten years, and any change in use requires adjusting the initial VAT reclaim.
Income from fundraising events is usually exempt from VAT and direct tax, but the exemption depends on factors such as the nature of the event and sponsorship arrangements; the Yorkshire Agricultural Society case recently tested this exemption.
Hospices must ensure Gift Aid declarations are correctly worded, valid, retained, and that digital declarations have an audit trail; retail Gift Aid scheme charges to donors are subject to VAT but allow VAT recovery on shop costs.
Primary source
Read the full article at Crowe UKThis summary was published on VATfaqs.com on 26 February 2026. It relates to VAT developments in United Kingdom. The original source is Crowe UK.
