Campaign: Irrecoverable VAT
A survey conducted by MORI in early September found low public awareness that charities pay tax and overwhelming support for a matching grant scheme to compensate charities for the irrecoverable VAT they incur.
The MORI Social Research Institute survey was commissioned by the Charities' Tax Reform Group - an umbrella organisation representing some 350 charities - with the objective of assessing public knowledge of the fact that charities pay VAT and public opinion as to whether the Government should compensate charities in full for the irrecoverable VAT they incur.
The survey was conducted by telephone between 2-4 September with 1005 adults, representative of all adults in telephone owning households.
The findings of the survey reveal that the public's awareness of charities' tax status is poor. Fewer than 3 in 10 adults (29%) know that charities pay VAT they cannot later recover; more than a third (37%) believe incorrectly that charities do not pay such taxes; while a similar proportion (34%) do not know whether charities have to pay such taxes.
The findings also reveal overwhelming support for the idea that the Government should compensate charities for the VAT that they incur when proving charitable services. Eight in ten (77%) of adults agree that the Government should compensate charities in full for the 17.5% VAT which charities have to pay. Only 14% of adults disagree with this proposition.
The questions asked were:
- As far as you are aware, do registered charities have to pay any taxes that they cannot recover at a later date, or not? In giving me your answer, I would like you to think just about taxes that are imposed by the Government.
- The Government wants charities to play a wider role in society. At present, when charities provide charitable services they pay a tax (VAT) of 17.5% to the Government. To what extent do you agree or disagree that the Government should compensate charities in full for this amount?