The Charity Tax Group (CTG) is to renew its call for charities to be able to reclaim irrecoverable VAT after a provision allowing academy schools to do so was included in the draft Finance Bill 2011.

Under the proposed legislation, academy schools will be able to recover VAT incurred on purchases made to support their non-business activities thanks to a new section to be inserted into the Value Added Tax Act 1994.

CTG believes that an extra clause could and should be added for charities, on the grounds that the government’s stated policy objective in the document is that academy schools should be able to recover VAT “just as schools run by local authorities can”.

In email update, CTG (which is led by Helen Donoghue, pictured) writes: “This reopens the whole issue of irrecoverable VAT incurred by charities.

“If academies are to be put on the same basis for VAT purposes as local authority schools, is there any reason why (for example) care homes run by charities should not be put on the same footing as care homes run by local authorities?”

CTG says it will be putting this case strongly in its response to draft bill consultation, which is open to consultation until 9 February 2011, as well as in its response to the Cabinet Office Green Paper on Commissioning Public Services.