Charities – VAT concessions ‘one-off’

The government has warned that the limited VAT concession it offered to charities last week does not signal further gains for voluntary organisations when the current review of the charity tax regime is completed.

VAT relief to charities is currently worth #200m a year, according to Customs & Excise, but charities say they still lose #350m annually in tax. Treasury financial secretary Dawn Primarollo lifted that burden slightly last week when she said VAT relief would be extended to resuscitation models used by charities and NHS trusts for first-aid training.

A spokesman said: ‘This is a one-off adjustment to existing relief, and does not set a precedent for the government’s handling of other claims to additional tax relief.’

There is still no date set for the announcement of last year’s results on the comprehensive review of charity taxation, even though charities and other bodies had to make their views known to Customs by 1 December. Action on VAT recovery topped the list of charities’ demands.

A Customs official said this week that an announcement was still likely before parliament rises later this month, although a Treasury spokesman said that the next government statement on tax was not due until the pre-Budget report in the autumn.

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