Charities: VAT Payments

House of Lords written question – answered at on 7 February 2005.

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Photo of Lord Steel of Aikwood Lord Steel of Aikwood Liberal Democrat

asked Her Majesty's Government:

Whether, in view of the amount of medical research undertaken by charities, they will consider making VAT recoverable on fundraising and recruitment by such charities.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

Since 1997, the Government have considered the issue of charities' irrecoverable VAT in two major reviews. We have decided that it would not be an affordable or efficient use of public resources to reimburse all 250,000 charitable bodies the VAT they incur; and also that there is no fair and principled basis on which we could decide that some charities would be reimbursed their VAT and some would not.

Instead, we believe that help for charities is more effectively deployed through other government measures that are currently worth some £3.3 billion per year to the voluntary and community sector, including tax reliefs worth some £2.4 billion per year; including for example VAT reliefs for many goods and services that charities purchase in connection with their fundraising and recruitment, such as advertising, appeal letters and envelopes, collection boxes, and lapel stickers and similar tokens for the collection of donations.

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