TaxCorporate TaxVAT victory on text donations

VAT victory on text donations

Campaign by text based fundraiser wins concession from chief secretary to the Treasury

VAT will not be charged on charity donations made by text, the government has
confirmed.

Lib Dem MP Mark Oaten had taken up the issue with Jane Kennedy the financial
secretary to the Treasury, following lobbying from SMS text based fundraiser
Vir2.

Kennedy wrote to Oaten to confirm the new position this week.

Previously it was common practice to charge VAT on the full amount of any
donations made by text on all UK mobile networks.

Roger Craven, Managing Director, Vir2 Ltd said, ‘Text donations are now
comparable with other ways of collecting donations in terms of the proportion
payable to charity. Potential donors are as likely to carry a mobile as a credit
card, but unlike credit cards, mobile phones are also a way for charities to
communicate their appeals as well as an easy and convenient means of small value
payment.’

The subject first came into the spotlight when £1m was raised in three days
for the Asian Tsunami Appeal after launching a text campaign. Due to public
pressure the HMRC gave a one off donation to the Appeal in compensation for the
VAT it had charged.

Kennedy wrote: ‘Donations to charity, including those made by text message,
are outside the scope of VAT — which means that no VAT is payable on them.’

Further reading:

VAT victory for
charity sector

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