Campaigns: Irrecoverable VAT
On 13 October 2005, CTRG launched its parliamentary campaign on VAT in the House of Commons at a meeting chaired by Tom Levitt MP (Labour), the Chairman of the All Party Group on the Community and Voluntary Sector. The campaign has cross party support and Tom Levitt was joined on the panel by Tim Yeo MP (Conservative) and Bob Russell MP (Liberal Democrat).
MPs heard an impassioned plea from a volunteer RNLI lifeboat man, David Sporle, who told them that he didn't put his life at risk to line the Treasury coffers. David, who works full time and who has spent three nights at sea already this week providing vital support at Southend Pier, said:
"When the RNLI spends money to provide this service, money which has been generously donated, it pays £3.2 million in VAT that it cannot recover; this is not what we risk our lives for. RNLI volunteers give their all: surely it is time for the Government to give back to our charity what belongs to our charity."
Strong support for the campaign across the charitable sector was demonstrated at the launch by the presence of leaders representing all the major charitable umbrella organisations, including:
- the Charities Aid Foundation (CAF),
- the Association of Chief Executives of Voluntary Organisations (ACEVO),
- the National Council for Voluntary Organisations (NCVO),
- the Institute of Fundraising, and
- the Charities' Finance Directors Group (CFDG).
All the charity leaders present emphasised that the people who suffer as a result of charities' irrecoverable VAT are among some of the most vulnerable members of our community, the elderly, the sick, children and those at risk.
Nick Kavanagh, CTRG Chairman, explained that these organisations are united in their determination to persuade the Government that now is the time for it to establish a matching grant scheme to compensate charities for their irrecoverable VAT. He revealed that this widespread support across the charitable sector is matched by overwhelming public support for the campaign's objectives.
A MORI survey carried out in early September found that 8 in 10 people believe the Government should compensate charities in full for their irrecoverable VAT. The survey also revealed a low awareness of the tax status of charities and the fact that they pay VAT in the first place.
Bob Russell MP referred to the Early Day Motion which he has tabled, 'Impact of VAT on the Voluntary Sector', which calls on the Government, as a priority, to introduce measures to reduce or remove crippling financial burdens on charities. This EDM has already attracted the support of 65 MPs and the campaign will seek to boost this number even higher over the coming months.
Stephen Bubb, the Chief Executive of ACEVO, said: "I am delighted to give my strong support for the campaign which deserves support for strong pragmatic and principled reasons."
Emphasising the importance of making it a grassroots campaign, Lindsay Boswell, Chief Executive of the Institute of Fundraising pledged to get the campaign's message out to all their 4000 members.
Shirley Scott, the Chief Executive of the Charity Finance Directors' Group, emphasised that: "providing a matching grant scheme to compensate charities for their irrecoverable VAT would not detract from the accountability of charities or their need to keep proper records." She urged charities to make clear to the public the extent of their financial burden.
Campbell Robb of the NCVO pointed out that "there is a disconnection between the Government's expectation that charities should play an increasing role in the delivery of services and their VAT treatment of charities, which made this more difficult by imposing a financial burden on them."
Graham Leigh of the Charities Aid Foundation said: "The Charities Aid Foundation supports the CTRG's campaign on VAT wholeheartedly. Donors and the general public expect the services to which they donate to be tax free and the CAF unreservedly supports the four key objectives of the campaign."