Readers’ forum: Reclaiming VAT on costs incurred by charity

I have been asked to help out a couple of local charities. Both are new charities and the people I’ve spoken to talk about reclaiming VAT on their costs but I know it’s not as straightforward as that.

Charity A is unlikely to make any ‘sales’ as such. It’s a charity set up to use heat seeking drones to find lost pets (mainly dogs). As far as I’m aware its only income will be grants and donations – if it manages to locate a missing dog the owner won’t be charged for it but will be asked for a donation instead. All its income will therefore be exempt from VAT so they can’t then register for VAT and reclaim any VAT charged on their costs – can readers confirm this to be the case?

Charity B is a smaller version of the Ampthill festival and will sell tickets for...