A non-profit company or the old “section 21” companies cannot merely by virtue of their registration as such claim input tax credits. Stated differently, the mere fact that a company may be registered as a non-profit company would not entitle it to claim input tax credits.
In short, to claim input tax credits, the general rule is that the taxpayer must supply goods or services for consideration, i.e. it must charge money for the services or goods rendered or sold respectively (as this will attract output VAT). Most non-profit companies generally do not charge money for the services performed but rather takes donations to fund most of its operations. Donations are, as a general rule, specifically excluded from the definition of “consideration” and as such input tax credits won’t be allowed under the general rule for taxpayers who fund their operations from donations.
While there are exceptions to this general “consideration requirement” for non-profit companies, they are only available if the non-profit company is a registered Public Benefit Organisation (PBO) (which registration does not follow automatically by virtue of registration as a non-profit company) and that PBO carries on certain welfare activities set out in regulation.