VAT guidance for charities and not-for-profit organisations

In this section:

You are here:
Home >
Charities and CASCs >
VAT guidance for charities and not-for-profit organisations >
How charities can import goods VAT-free

How charities can import goods VAT-free

Certain donated goods can be imported free of VAT, from outside the Customs Union of the European Union (EU), by charities and other not-for-profit organisations.

The goods have to be any of the following:

basic necessities for the needy and vulnerable
goods to be used or sold at charity events for the benefit of the needy and vulnerable
equipment and office materials to help run an organisation for the benefit of the needy and vulnerable

There are also special procedures for relief from VAT on the import of goods to help deal with disasters in the Customs Union.

This guide explains how your organisation can import goods free of VAT, what goods you can import and how you can use them.

On this page:

Who can import goods free of VAT?
Which goods are covered?
Goods not eligible for VAT relief
How to claim the VAT relief
Selling or distributing goods you imported VAT-free
Contacting the HMRC Charities Helpline
More useful links

Who can import goods free of VAT?

Normally if you import goods from outside the Customs Union of the EU, you have to pay import duty and VAT. However, some donated goods can be imported free of VAT, if they are imported by a charity or certain other types of qualifying organisation, and providing that there is no commercial intent by the donor.

You can import goods free of VAT if you are:

a charity registered by the Charities Commission, or the Office of the Scottish Charity Regulator
a state organisation devoted to welfare

You can also qualify to import goods free of VAT if you are one of the following organisations, and you are run on a not-for-profit basis, and your objective is the welfare of the needy:

hospital
youth organisation
club, home or hostel for the aged
orphanage or children's home
organisation set up for the relief of distress caused by particular disasters in the Customs Union
organisation concerned with the relief of distress generally, such as the British Red Cross Society or the Salvation Army

There are also reliefs from VAT when importing certain goods for disabled people. These are available to organisations principally concerned with the education of or the assistance to disabled people that HM Revenue & Customs (HMRC) has already approved to receive the goods duty free, or to disabled people importing the goods for their own use.

Find out more about importing goods for disabled people free of VAT in VAT Notice 371

Top

Which goods are covered?

Goods only attract this relief from VAT if they:

have been donated (not purchased)
are imported from outside the Customs Union of the EU (outside the EU, Turkey, San Marino and Andorra)

The goods that can be imported VAT-free are:

basic necessities for the needy and vulnerable
goods to be used or sold at charity events for the benefit of the needy and vulnerable
equipment and office materials to help run an organisation for the benefit of the needy and vulnerable

See the sections below for more detail on each of these.

There are also special procedures for relief from VAT on goods imported to help deal with disasters in the Customs Union. You'll need to contact HMRC to discuss these. The relief from VAT does not apply to materials and equipment intended for rebuilding disaster areas.

Contact HMRC

Find out which countries and territories are included in the EU VAT area in VAT Notice 703

Meaning of basic necessities

Basic necessities are goods that will be distributed free of charge to meet the immediate needs of needy people in the Customs Union or overseas. They include:

food
medicines
clothing
blankets
orthopaedic equipment
crutches

You'll only get relief from VAT if the goods were donated to you in the first place. You'll get relief from duty regardless of whether you paid for them or not.

VAT relief on imported goods for charity events - qualifying rules

Most imported goods that you use or sell at charity events qualify for VAT relief provided that:

the charity events are run to raise funds for the benefit of the needy and vulnerable
the charity events are normally not held more than four times a year by any one organisation
the goods were received free of charge from a person or organisation established outside the Customs Union
there was no commercial intent on the part of the donor

Imported equipment and office materials that qualify for VAT relief

Service industry machines, tools and equipment, office materials, and fixtures and fittings qualify for relief provided that you receive them:

free of charge from a person or organisation established outside the Customs Union
without any commercial intent on the part of the donor
solely to help run your organisation and carry out your charitable and philanthropic aims for the benefit of needy people

Top

Imported goods not eligible for VAT relief

The following imported goods aren’t eligible for relief from VAT:

alcoholic products - including alcohol-based perfume
tobacco and tobacco products
coffee and tea
motor vehicles other than ambulances
items associated solely with worship such as statues and pulpits

In addition, HMRC may limit the quantities or kinds of goods that you can import to avoid any abuse or distortion of competition, and there are general restrictions on importing specific types of goods.

Top

How to claim VAT relief

Importing goods in accompanied baggage or freight

If you import goods valued at £600 or less in your accompanied baggage, you must declare them to customs when you arrive, and produce evidence to satisfy us that you are eligible for the relief.

If the goods you are importing are worth more than £600, or if you are importing the goods as freight, you must claim relief by completing an import declaration on a Single Administrative Document (SAD) (form C88).

You will need to enter one of the special Customs Procedure Codes (CPCs) in Box 37 of the SAD to claim the relief - see below.

Importing goods by post

If you are importing goods by post you should ask the sender to write 'CHARITY ITEMS: RELIEF CLAIMED' on the package and its accompanying international customs declaration.

If the package is not clearly marked it may not be delivered until you have paid the Customs Duty and VAT. You should pay these charges and then write to customs at the postal depot where the charges were raised. Your letter must explain what happened, how the goods will be used and enclose the document showing the charges. If customs are satisfied that you qualify for relief, they will repay the Customs Duty and VAT.

Claiming relief after the goods have been imported and customs charges paid

You should normally claim relief at the time you import the goods. However, subject to certain conditions, HMRC may accept a belated claim and repay the appropriate charges.

Find out more about repayments in VAT Notice 199

Customs Procedure Codes (CPCs)

You’ll need to use one of the following CPCs:

CPC 40 00 C20
CPC 40 00 C26

CPC 40 00 C20 is used for goods imported by an approved charity or philanthropic organisation for that includes:

basic necessities to meet the immediate physical needs of people which will be distributed free of charge
goods sent free of charge to the organisation to be used or sold at occasional charitable events to raise funds for needy persons
equipment and office materials sent free of charge to be used solely by the organisation to meet its charitable and philanthropic aims

Note that relief can’t be claimed on alcoholic products, tobacco products, coffee, tea and motor vehicles other than ambulances.

CPC 40 00 C26 is used for the importation of goods for the benefit of victims of a disaster affecting the territory of the European Community or countries with which it has a customs union, imported by an approved charitable or philanthropic organisation or disaster relief agency for which relief from import duty and VAT is claimed.

The goods must be:

for distribution free of charge to the victims of such disasters
to be made available free of charge to the victims whilst remaining the property of the organisation
to meet the needs of the disaster relief agency

Note: relief can not be claimed on materials and equipment intended for rebuilding disaster areas.

For more information on these CPCs go to Notice 317

Top

Selling or distributing goods you imported VAT-free

You don’t have to pay Customs Duty or VAT when you distribute goods that you imported VAT-free as basic necessities for needy people, or to help deal with disasters within the Customs Union.

You may also lend, hire out or transfer any VAT-free imported goods to another approved organisation without payment of Customs Duty and VAT as long as you notify HMRC first.

You may also sell any VAT-free imported goods at charity events without payment of Customs Duty and VAT providing this is to raise funds for the organisation, and that you meet the conditions described in the earlier section ‘Which goods are covered’.

You must pay Customs Duty and VAT if you dispose of the goods for any other purpose. HMRC may visit you to confirm that you're complying with the conditions for this relief.

Top

Contacting the HMRC Charities Helpline

For more information you can contact the Charities Helpline on Tel 0845 302 0203 (open from 8.00 am to 5.00 pm, Monday to Friday). Select option 3 for VAT reliefs.

Top