Charities do not have to charge VAT when selling donated items. Previously, animals were considered donations only if they were directly handed over by their owners, meaning sales of strays incurred VAT.

In Gablesfarm Dogs and Cats Home v Revenue & Customs [2008] UKVAT V20519 the Tribunal looked at whether the fact that the original owner had not actually donated the animals to the charity (because many of them had simply been abandoned) affected its ability to treat income from the subsequent sale of the animals as zero-rated income from the sale of donated goods. The Tribunal held that such sales were zero-rated regardless of whether the animals had been provided to the charity by the public, the police or the local authority.

Gablesfarm was followed in Three Counties Dog Rescue v Revenue & Customs [2011] UKFTT 817 (TC).