TaxCorporate TaxCharity battles Customs over lost VAT

Charity battles Customs over lost VAT

The Children's Society is currently locking horns with Customs & Excise in a test case that could save the charity sector £5m a year in lost VAT.

Link: Charities chase Customs over VAT bill

Ten of the country’s leading charities are queuing up behind the Children’s Society, which is arguing that VAT paid on magazines sent out to donors in return for a monthly direct debit payment should be recoverable.

The Children’s Society alone would stand to recoup almost £1m should the claim prove fruitful.

Direct debit donors are by far the most preferable source for charities because they provide a degree of financial security. The majority are secured through street fundraisers, so-called ‘charity muggers’.

Charles Nall, finance and administration director at the Children’s Society, said any ruling would ‘have a relevance to all of the other 10 major charities’ cases that have been put forward on this issue’.

The tribunal began on Tuesday this week in London and was expected to last two days.

Amnesty International is one of the 10 charities waiting in the wings. Its UK finance director, Melvin Coleman, said the organisation was facing a three-fold increase in its VAT bill .

Customs caused outrage after it charged VAT on registration fees for this year’s London Marathon.

Customs would not comment on the tribunals until after the ruling.

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