TaxCorporate TaxNo VAT for charities, say FDs

No VAT for charities, say FDs

An overwhelming majority of UK finance directors believe charities should be able to recover all their VAT, according to the latest Accountancy Age/Reed Personnel Big Question survey, writes David Rae.

Link: Charity FDs slam VAT legislation

The news that 87% of FDs back the move will pile more pressure on chancellor Gordon Brown who faces calls from 120 MPs who signed an Early Day Motion demanding measures to ease the VAT burden on charities.

Treasury spokesmen have consistently said Brown will not make VAT changes in next month’s Budget.

Helen Donoghue of the Charities Tax Reform Group said several EC member states were locked in talks concerning the status of their charity VAT law.

Of the 258 finance directors who responded to this week’s Big Question survey, 225 believe the government should change charity VAT law and allow the full recovery of the tax.

Only 7% argue charities should not be able to reclaim all their VAT.

The result is a surprising indictment of the government’s approach to charity law. ‘Charities play a vital role, filling the gap between corporations and government,’ said John Buckley, FD at Sauter Automation. ‘It is absurd for the government to penalise them by partially disallowing their VAT reclaim, when they exist largely because government itself doesn’t do its job properly.’

One respondent said a change in law could increase the likelihood of the public donating because donors would know it was ‘going to charity and not the government’.

The Treasury has said Brown will not help charities on VAT in next month’s Budget. But Shirley Scott of the Charity Finance Directors’ Group said she would continue to lobby the government. The group is considering whether to take the issue to Europe.

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

2m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

4m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

5m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

8m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

8m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

8m Alia Shoaib, Reporter