Charity Tax Group optimistic on irrecoverable VAT issue

Finance | Gareth Jones | 1 Sep 2007

The Charity Tax Group (CTG) has said it will step up its campaign on the sector's £500m irrecoverable VAT bill despite the government's negative response to an online petition on the issue. The petition, which launched in March, received 9,445 signatures from people calling on the government to "Stop making charities pay VAT".

In response the government said that it would not be "an affordable or efficient use of public resources to reimburse all 250,000 charitable bodies in the UK for the VAT they incur regardless of the activities they are involved in or their financial health". It concluded that available resources would be better distributed through "existing tax reliefs, spending schemes and investment funds available to the charity sector".

The response came days after comments from the third sector minister Phil Hope suggested charities were giving up the battle on irrecoverable VAT. However, CTG director Helen Donoghue was "more than positive" that future developments would make it harder for the government to ignore the problem. She said that next year's European Commission review of the taxation of public bodies and a forthcoming review of how local authorities deal with VAT would draw attention to the problems faced by charities and highlight their disadvantageous position.

Directory: Charity Tax Group | Office of the Third Sector
Who's Who: Helen Donoghue

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