Animal charities can reclaim overpaid VAT

Animal charities that take in stray animals and 'sell' them to new owners can now do so without having to add VAT to the price.

A VAT tribunal ruled that abandoned animals handed in to rescue centres and charities by police or members of the public are zero rated for VAT when they are rehomed. HMRC previously said that only animals 'donated' to such charities by their original owners could be zero-rated.

This means that charities can now claim for previously overpaid VAT, which could go back a number of years.

The tribunal was ruling on behalf of the Gablesfarm Dogs and Cats Home in Plymouth.