Leading umbrella bodies want VAT tax rebate scheme extended to whole sector
Charity umbrella bodies are pressurising the UK government to extend a rebate scheme which could benefit the sector by some £1.5 billion a year.
The treasury introduced VAT rebates for hospices, search and rescue charities, and air ambulances in last year’s autumn statement.
By removing tax barriers for charities, the government could free up hundreds of millions of pounds
Now the Charity Finance Group, NCVO, Institute of Fundraising, Navca, the Association of Charitable Foundations and the Small Charities Coalition want it extended to the whole sector.
They have written to Chancellor George Osborne making their case.
“Estimates vary, but the cost of irrecoverable VAT could be up to £1.5bn a year – money which is being spent by charities to deliver public benefit,” the letter said.
“Charities are having to operate in a tough financial environment with income, particularly from government, being squeezed.
“This makes having an effective system of tax reliefs for charities even more important.
“By removing tax barriers for charities, the government could free up hundreds of millions of pounds that could be directed towards charitable objectives – helping people at home and around the world.”
They also call for government to bring forward the review of the Gift Aid Small Donations Scheme, due in 2016, and ask for a review into corporate gift aid to consider whether charities should be able to claim the tax relief rather than companies.
