Wednesday 12 January 2011

VAT- there is hope!

Lunch today with the brilliant Tom Flood, CEO of BTCV and ACEVO board-member. Tom has been a great friend of ACEVO over the years.

There has been a lot of noise in the media of late about VAT and the impact on charities, with Sue Ryder Care pointing out that the VAT rise will cost them over 1 million. Tom’s organization will be hit too, and we ruminated over the many years of campaigning that ACEVO and others have done on the subject. Governments have long known VAT hits our sector unfairly, but none have grasped the nettle and dealt with the problem.

Now however the pressure is growing. The VAT rise will cost us nearly 150 million. But it is also a major impediment to the Government’s public service plans. They want more third sector delivery – but whereas public sector agencies get their VAT rebated from HMT, we get nothing, making us look as if we cost more (in fact, of course, it’s not as if the taxpayer doesn’t pay for the HMT rebate). They want public sector staff to form new independent mutuals and social enterprises – but who in their right mind would if it meant kissing goodbye to a VAT rebate potentially worth hundreds of thousands of pounds!

So I’ve been raising the volume on this, raising it at every opportunity – not just with Treasury ministers but across the piece. This is not a geeky tax issue. If ministers are interested in public services, they need to be interested in this, as I shall be saying to Francis Maude when I see him tomorrow. And I sense we’re making progress. Tomorrow the treasury will answer a question on charity VAT from Aidan Burley MP in the Commons. I look forward to the response!!

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