Should I charge VAT on grant income?
Sometimes. Broadly speaking organisations that are VAT registered should treat grant income as VATable supplies if they are required under the terms of the grant to deliver services to the organisation providing the grant.
If a grant is given in the same way as a donation and nothing is expected in return from the grant making body, there is no supply of services for the money and the income falls outside the scope of VAT.
This is a complex are and VAT on grant income should be considered on a case by case basis.
The following HMRC pages are provided as guides taken from case law:
