Charities that received a VAT rebate from HMRC via JustGiving earlier this month may have to repay some of it.
More than 9,000 charities received a payment after HMRC conceded that transaction fees on JustGiving should not be subject to VAT, but charities may have already recovered some of this through annual VAT returns, according to Andrew Norman, VAT manager at Buzzacott.
Norman told civilsociety.co.uk that the proportion of the rebate charities had to pay would “depend on how much if any they had recovered from their VAT”, but added that “I would not expect any charity to have recovered the full amount”.
He said the adjustment should be made “through a correction on the charity’s next VAT return” and that it is something that charities should be aware of for when they are next “visited by Customs for a VAT inspection”.
JustGiving confirmed that some charities would be affected and directed civilsociety.co.uk to HMRC’s public notice which outlines how to report an error.
If the amount is less than £10,000 charities should "include the value of that adjustment on your current VAT return". If the amount is more than £10,000 then organisations need to fill out form VAT 652. Click here for the full notice from HMRC.
Charities not received rebate
Norman added that he was “aware of a couple” of charities who had not received a rebate from JustGivng.
JustGiving said that all charities should have received payment on 13 June. Charities that are still members should have had the rebate paid directly to their accounts and those that are not were sent a cheque.
A spokeswoman said: “If for any reason a charity believes they may be eligible and has not had any communication from us by 30th June 2012, they should email us on [email protected] so we can investigate.”
Charities eligible for a rebate are those that raised money using the platform between 1 September 2004 and 31 December 2010. HMRC agreed that VAT should not be charged on transaction fees for donations in December 2010 and JustGiving stopped charging it in January 2011.