Charities lose zero rating on stationery

The VATman has stuck his fingers into charities’ collecting boxes in Customs & Excise’s latest attempt to recoup the missing VAT millions.

Customs has announced that supplies to charities of stickers, draw tickets, notepaper and general use envelopes will no longer be zero-rated. Now only stationery items directly used in fund-raising campaigns, such as pre-printed collecting envelopes and pre-printed letters appealing solely for money, will retain the zero rate.

This is the second recent blow to the charity sector. In May, Customs announced that zero-rating would no longer apply to advertisements for job vacancies.

Andrea Clarkson, Binder Hamlyn VAT manager, said: ‘Charities are bearing the brunt of Customs’ crackdown. Some spend a lot on stationery. Biggest charities could suffer a great deal.’

The latest move follows a recent VAT tribunal case involving the Royal Society for the Encouragement of the Arts, Manufacture and Commerce.

Customs defended the change. A spokeswoman said: ‘We had given the zero-rating, but it was the tribunal chairman who said we had gone further than the statute.’