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... and the good news is, nothing changes for product donations to In Kind Direct!
From 1st April 2026, updated VAT rules mean that UK businesses can donate eligible surplus goods to registered charities without having to account for VAT. This is a significant breakthrough for tackling poverty, reducing waste, and restoring dignity for everyone.
As the UK’s leading product giving charity, In Kind Direct (IKD) has been providing evidence and advocating for change to support the charitable sector and communities.
For the last three years, we worked closely with the BRC, CBI, HM Treasury, HMRC and other national charities to ensure the legislation supports responsible, compliant and scalable product donation for businesses of all sizes.
For companies already working with us, nothing changes! Product donations to In Kind Direct are already exempt from VAT and we’re already compliant with HMRC requirements.
Read on to learn more about VAT rules, why it matters to our network and how we support communities and companies to make product giving effortless.
A win to fighting poverty for people, charities, businesses and planet.
Under the new rules, VAT is no longer charged when companies donate goods up to a certain value to charities:
These two points may seem small, but together, they remove a long‑standing barrier and make it easier for companies to redirect essential products to communities. This is a significant win to fighting poverty in the UK and In Kind Direct has been advocating for this change.
Our network of charitable organisations tell us that they often lack time or resources to manage complex VAT arrangements.
We also know that one product donated can go a long way in brightening someone’s day! This is just one testimonial of thousands that we receive each year:
“We are located in an area of high deprivation and the cost of living has hit people hard […]. To be able to support them in small ways – for example, by offering free hygiene and period products in our bathrooms and to take away, we are alleviating a little pressure from them as the winter and associated energy costs take hold.” S.H.E UK
While the new rules introduce reporting and documentation requirements for businesses, the good news is that product donations to IKD are already VAT-free, so nothing changes for partners donating products through In Kind Direct.
We also have strong compliance, audit and reporting processes in place to demonstrate the impact and destinations of products donated to us.
As a registered charity, we already provide:
This is good news for all our partners: the model we offer remains the simplest, most impactful route for largescale product donation.
It’s been a long project in the making!
70% of our network insights panel agreed In Kind Direct was well-placed to speak to policymakers about issues affecting them nationally. This has guided our advocacy work to represent their needs with policymakers.
Over the past three years, In Kind Direct has played a central role in shaping the VAT reform:
As the UK’s leading product giving charity, our impact of 30 years has helped evidence and steer this policy change, to support over 9,000 communities in 2025.
In Kind Direct is standing alongside other national trailblazer organisations, such as Charity Finance Group (CFG), Neighbourly,and CBI in leading the way with government.
“Joining In Kind Direct has enabled us to provide new support in our local community – the quality items you provide have helped reduce stigma, increase people’s physical and mental well being and I definitely think it’s made our clients feel more valued and cared for.”
“As a trustee of In Kind Direct and Co-CEO at Charity Finance Group, I have had two reasons to put my energy into securing this new VAT relief which has the potential to unlock product giving to charities by businesses, right across the UK.
“Whether it’s period products, toys, carpets or jumpers, product giving means charities can do so much more to tackle poverty, restore dignity, and bring joy to people who so often feel excluded. The impact can make a difference to health and wellbeing, school attendance and attainment, employment and in so many other ways.
“I’m delighted that this VAT relief has been secured. The next stage in the campaign is making sure businesses and charities know about this relief and making good use of it, for everyone’s benefit.”
What's actually changing from April 1st? Will there be more admin required? Are all products eligible for VAT exemptions? Everything you need to know about the new UK VAT regulation and how In Kind Direct supports you in providing compliance processes that are aligned with HMRC requirements.
From 1st April 2026, UK businesses will be able to donate eligible products to registered charities without paying VAT.
The exemption applies when products are:
This change removes a long‑standing barrier, making it easier and more cost‑effective for businesses to donate essential items rather than sending them to waste or disposal.
Yes, HMRC requires donating businesses to document:
If you donate products through In Kind Direct, we provide all the necessary evidence, documentation, and impact reporting. We ensure your products donation remains fully compliant.
We support more than 9,000 charities, community groups, schools and other charitable organisations nationwide, of all sizes. Many do not have the infrastructure to manage product donations at scale or to manage a new VAT compliance process themselves.
Our commitment at In Kind Direct is to make product giving easy by providing:
We make it safe, simple, and impactful for businesses to donate responsibly, from the smallest B-Corp organisations to global FMCG brands.
Yes and no.
When donating products to In Kind Direct, you can continue to donate any value of item to us. This is because we are already compliant with previous VAT rules. We have supported this change to unlock more product donations through all routes to communities
If you are taking advantage of the latest increased VAT relief, HMRC applies thresholds to each individual item:
These limits may be reviewed in the future, and are based on the cost price, not RRP. As VAT guidance evolves, we believe the need for clear, compliant infrastructure is critical, to help businesses navigate donation safely. We remain closely involved in shaping that guidance with HMRC and HM Treasury.
IKD can advise corporate partners on whether their surplus goods qualify, summarising the relevant product categories and value thresholds as helpful.
Under the new rules, the receiving organisation must be a registered charity and/or CIO organisations.
Because In Kind Direct is a registered UK charity, your donations can still reach:
We distribute to these organisations on your behalf, while keeping your donation fully compliant.
Although we welcome product donations of essentials across many categories, we know the most needed items from our network include:
We can advise on seasonal needs and real‑time demand across our 9,000+ community groups and charities.
Charitable organisations can access the catalogue by registering with us for free.
As a registered charity, In Kind Direct makes a small charge to cover a proportion of our operating costs, around 70%. This includes sourcing, storing, shipping the mix of products our network needs, to any registered address across the UK.
IKD raises funds to meet the rest of our costs. Products may be distributed without a charge where alternative additional funding is secured.
We aim to keep these fees as low as we can, to maximise the savings we unlock for charitable organisations while remaining sustainable.
This enables us to provide a safe, scalable, fully governed product‑giving infrastructure for UK businesses, and dedicated customer support and impact reporting for our network partners.
You can learn more about it on our website on our FAQs page under ‘Ordering Products’.
We have robust systems to ensure goods are distributed safely and responsibly:
This is one of the reasons our model is trusted by government, regulators, and major UK retailers.
Great question! Most businesses can begin donating items within days.
We manage:
Our fulfilment and charity‑network model allows us to move product quickly, especially essential items needed urgently across the UK.
You can begin the process today or ask any further questions by contacting: info@inkinddirect.org
Or complete our partner form here.
Our team will guide you through next steps and assess how we can best support your product‑giving strategy.
Absolutely. Many of our partners work with us strategically to:
We’re always happy to do top‑to‑top conversations to help shape your long‑term approach to product-giving.
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