# Charity e-invoicing: does the 2029 mandate apply to you?

> Whether a charity is caught by UK e-invoicing depends on its VAT position. How the 2029 mandate meets charity reliefs, grants and trading subsidiaries.

- Canonical URL: https://einvoices.uk/news/e-invoicing-charities
- Published: 20 October 2026 (2026-10-20)
- Last updated: 20 October 2026 (2026-10-20) (not updated since publication)
- Author: Floris Lindenaar, Editor, e-invoicing expert (https://einvoices.uk/authors/floris-lindenaar)
- Publisher: einvoices.uk (https://einvoices.uk)
- Type: Guide
- Topics: Sectors, VAT, 2029 mandate, Small business
- Language: en-GB (UK English); covers the United Kingdom

## Sources

- [How VAT affects charities (VAT Notice 701/1)](https://www.gov.uk/guidance/how-vat-affects-charities-notice-7011)
- [VAT guide (VAT Notice 700)](https://www.gov.uk/guidance/vat-guide-notice-700)
- [How VAT works](https://www.gov.uk/how-vat-works/vat-thresholds)
- [Opting to tax land and buildings (VAT Notice 742A)](https://www.gov.uk/guidance/opting-to-tax-land-and-buildings-notice-742a)
- [Promoting electronic invoicing across UK businesses and the public sector: consultation response](https://www.gov.uk/government/consultations/promoting-electronic-invoicing-across-uk-businesses-and-the-public-sector/outcome/promoting-electronic-invoicing-across-uk-businesses-and-the-public-sector-consultation-response)

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For most charities, whether e-invoicing applies comes down to one question: **are you VAT-registered?** From **April 2029**, VAT invoices issued between VAT-registered businesses, and to public bodies, must be e-invoices. A VAT-registered charity or trading subsidiary that invoices businesses or councils will be in scope as a sender. A small charity that is not VAT-registered issues no VAT invoices, so the sending obligation should not reach it. What it will have to *receive* is still open.

## Charities and VAT: the starting point

[VAT Notice 701/1](https://www.gov.uk/guidance/how-vat-affects-charities-notice-7011) treats a charity, or its trading subsidiary, like any other business when it makes taxable sales:

- It **must register** if its taxable sales exceed the **£90,000** threshold, and can register voluntarily below it. A charity with no taxable sales cannot register at all.
- Its income falls into three types: **outside the scope** (for example donations and most grants), **exempt** (for example qualifying fundraising events), and **taxable**.
- Many charities run taxable trading through a **trading subsidiary**, which may be VAT-registered in its own right.

[VAT Notice 700](https://www.gov.uk/guidance/vat-guide-notice-700) (paragraph 16.2.1) adds two rules that matter here. A VAT invoice is needed for **standard- or reduced-rated** supplies to **VAT-registered** customers. VAT invoices are **not required** for zero-rated supplies or for customers who are not registered.

## Which charity invoices could be caught

| Income or document | VAT invoice today? | In scope of the 2029 mandate? |
|---|---|---|
| Donations | No (outside the scope) | No |
| Grants freely given | No (outside the scope) | No |
| Funding that pays for a supply (for example a contract to deliver services) | Yes, if taxable and the charity is registered | Likely, if it is a VAT invoice to a business or public body |
| Sponsorship giving the sponsor significant benefits | Often taxable, so yes if registered | Likely |
| Commercial room hire, advertising sales, consultancy | Yes, if taxable and registered | Likely |
| Exempt fundraising events | No | No VAT invoice, so treatment not yet confirmed |
| Charity shop sales to the public | No (B2C) | No |
| Invoices received by a charity that is not VAT-registered | Suppliers may still issue VAT invoices | **Not yet confirmed** |

"Likely" reflects the headline policy that all VAT invoices must be e-invoices. The detailed scope rules have not been published.

### Grant or contract?

This distinction now has a second consequence. Notice 701/1 explains that funding is outside the scope if it is freely given. Conditions that only make sure the money is properly spent ("good housekeeping") do not turn it into payment for a supply. If the funder gets something in return, or a third party gets a directly linked supply, it may be consideration. If it is consideration and taxable, a VAT-registered charity needs a VAT invoice, which from 2029 means an e-invoice. Getting this right matters most with public-sector funders, which are themselves moving to e-invoicing.

## Charity VAT reliefs on purchases

Certain goods and services are **zero-rated or reduced-rated** when supplied to charities, whether or not the charity is VAT-registered. Examples from Notice 701/1 include advertising, certain medical and rescue equipment, and fuel and power for qualifying use. The mechanism:

- The charity gives the supplier an **eligibility declaration** (examples are in the Notice 701/6 supplement) and evidence of charitable status.
- The **supplier** is responsible for applying the correct rate and keeps the declaration.
- For fuel and power used partly for qualifying purposes, the charity certifies the percentage, and the supplier apportions.

Nothing announced so far moves this paperwork into the invoice itself. The supplier's e-invoice would carry the zero or reduced rate, and the declaration would stay on file. Whether the UK specification adds a field to reference a relief or certificate is **not yet confirmed**. For VAT category codes, see [UK VAT category codes in Peppol](https://einvoices.uk/news/uk-vat-category-codes-peppol).

Property is similar. A landlord's option to tax does not apply to a building used solely for a **relevant charitable purpose**, if the tenant or buyer says so before the supply ([VAT Notice 742A](https://www.gov.uk/guidance/opting-to-tax-land-and-buildings-notice-742a)). See [landlords and option to tax](https://einvoices.uk/news/e-invoicing-property-landlords).

## Charities delivering public contracts

Many charities deliver services under contracts with councils, the NHS or government departments. On public contracts, the buyer must already **accept** compliant e-invoices (Procurement Act 2023, section 67; regulation 70A in Scotland). From 2029, a VAT-registered charity's VAT invoices to those bodies must be e-invoices. See the [council](https://einvoices.uk/news/local-council-e-invoicing-suppliers) and [central government](https://einvoices.uk/news/central-government-e-invoicing-suppliers) guides.

## What is not yet confirmed

- Whether organisations that are **not VAT-registered** must be able to **receive** e-invoices. This matters for thousands of small charities. See [non-VAT-registered businesses](https://einvoices.uk/news/e-invoicing-non-vat-registered-businesses).
- How **VAT groups** that include a charity's trading subsidiaries will be treated. See [VAT groups and e-invoicing](https://einvoices.uk/news/e-invoicing-vat-groups).
- Whether any support or simplification will be offered to small organisations. The [consultation response](https://www.gov.uk/government/consultations/promoting-electronic-invoicing-across-uk-businesses-and-the-public-sector/outcome/promoting-electronic-invoicing-across-uk-businesses-and-the-public-sector-consultation-response) recorded concerns about the cost to small and low-volume invoicers, and said the government will consider sector needs.

The roadmap due at Budget 2026 (28 October 2026) should answer some of these.

## What to do now

1. **Confirm your VAT position**, and that of any trading subsidiary. Who is registered, and under which number?
2. **List your income streams** and mark which ones produce VAT invoices to businesses or public bodies.
3. **Review funding agreements** where the grant-or-contract question is borderline.
4. **Ask your finance software provider** about Peppol plans, especially if you invoice public bodies.
5. **Use our [scope checker](https://einvoices.uk/tools/am-i-in-scope)** for a quick first view.

This is general information, not tax advice. Charities should follow HMRC's guidance in Notice 701/1 or take professional advice for their own position. See also the [mandate guide](https://einvoices.uk/mandate).

## Frequently asked questions

### Do charities have to use e-invoicing from 2029?

A VAT-registered charity, or its trading subsidiary, will need to issue its VAT invoices to business and public-sector customers as e-invoices from April 2029. For charities that are not VAT-registered, the position on receiving e-invoices has not been confirmed.

### Does a charity need to send an invoice for a grant or donation?

Grants given freely, with nothing supplied in return, are outside the scope of VAT, so no VAT invoice arises. Some funding is in fact payment for a supply. Charities should check HMRC's tests in VAT Notice 701/1.

### How do zero-rated charity reliefs work with e-invoicing?

The charity gives its supplier an eligibility declaration, and the supplier applies the relief and keeps the declaration. Nothing announced so far changes that. The supplier's e-invoice would simply carry the zero or reduced rate.

### What is the VAT registration threshold for charities?

The same as for any business: taxable turnover over £90,000. Charities below it can register voluntarily.

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How to cite: "Charity e-invoicing: does the 2029 mandate apply to you?", einvoices.uk, 20 October 2026, https://einvoices.uk/news/e-invoicing-charities

einvoices.uk is an independent publication and is not affiliated with HMRC or the UK Government. Nothing here is tax advice; check the sources and official GOV.UK guidance before acting.