Share

European report highlights unfairness of UK VAT regime, says CTG

Helen Donoghue, Charity Tax Group
News

European report highlights unfairness of UK VAT regime, says CTG

Finance | Tania Mason | 14 Apr 2011

Charity Tax Group has hailed a new report published by the European Commission on the different VAT treatments in different EU member states, as a major milestone in its campaign to secure a fairer VAT regime for UK charities.

The report, written by consultants Copenhagen Economics, is titled VAT in the public sector and exemptions in the public interest.  CTG, which has been working with other charities across Europe to highlight the inconsistencies in various VAT regulations, said the study “clearly demonstrates the problems that charities experience with the current VAT system”.

Copenhagen Economics examined the eight refund schemes in place in the EU member states that allow public bodies to recover input VAT when outsourcing support services.

CTG’s director Helen Donoghue said the study found that the present treatment of public bodies has “distortive effects in relation to the economic decisions they take, in particularly about outsourcing and competition with the private sector”.

Although the report recommends moving to a full taxation model – a solution that CTG feels is too politically contentious to be realistic – it also agrees that refund schemes could be extended throughout the EU and, crucially, argues that any refunds should apply not only to taxpayer-funded bodies, but also to charities that replace or supplement state provision of public services.

Donoghue said: “The study raises very important issues for the future treatment of public bodies and charities in the EU and its findings need to be carefully analysed and weighed before any decisions are reached.

“But it clearly demonstrates that the present system is unsatisfactory and causes serious distortions, not least in the area of outsourcing from public bodies to charities where the VAT system causes severe problems at present.”

She said the report’s conclusion that a refund scheme should be open to those organisations that provide public benefit that is funded by the taxpayer, as in the Canadian model, is “very welcome”.

“We strongly hope the universal refund scheme option will be considered positively.”

The European Commission will now consider the report alongside responses to its green paper on VAT, which is out for consultation until the end of May.

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

ASA: “I wish I had breast cancer campaign” did not breach guidelines

23 Apr 2014

The Advertising Standards Agency has not upheld criticism over a series of controversial adverts by Pancreatic...

HMRC doubles scrutiny of charity gift aid claims following Cup Trust

22 Apr 2014

HM Revenue & Customs more than doubled the number of investigations into claims for gift aid in the...

Donations to foodbank appeal surge after critical Mail article

22 Apr 2014

The Trussell Trust’s Easter Appeal raised more than £50,000 in two days after a backlash on social...

Horse charity faces closure amid claims it is owed £70k by council

23 Apr 2014

A horse charity in Northern Ireland has said it may have to shut because of a massive bill it believes...

Shawcross terror warning in national press

22 Apr 2014

Terrorist abuse of charities is “potentially the most deadly” problem the Charity Commission faces,...

Husband and wife jailed for three years for charity theft

22 Apr 2014

The former chair of Lincoln and District Mencap and his wife have both been jailed for fraud and theft...

'Technology can offer charities more than just online donations'

10 Apr 2014

Charities are focusing too much on using digital tools for fundraising instead of how technology can be...

Amnesty calls for 'full and frank disclosure' on alleged US surveillance

9 Apr 2014

Amnesty International has warned that alleged mass surveillance by the American intelligence agency NSA...

Virgin Money Giving launches app following year of growth

1 Apr 2014

Virgin Money Giving has launched an app for users after reporting that 30 per cent of traffic to its platform...

Join the discussion

 Twitter button

@CSFinance