Consultation tracker
CTG survey on VAT - WE NEED YOUR INPUT
- Published: 03/03/10
- Deadline for responses: n/a
THIS IS AN ONGOING SURVEY PLEASE DO NOT HESITATE TO TAKE PART AT ANY TIME
Given the state of the public finances, there is widespread speculation that, whatever the result of the forthcoming election, the incoming Government will decide to increase the standard rate of VAT. Under EU rules, the maximum permitted standard rate is 25%. As the UK standard rate is currently 17.5%, which is lower than the average across the EU, it has been suggested that an increase to 20% is likely.
Charities are unintended victims of the way the VAT system was designed as they are treated as the final consumer even when they are not.
Because of the risk of a VAT increase, CTG is keen to update its information on:
· The impact of VAT at present – and the % of unrestricted income that is lost in irrecoverable VAT;
· The impact of any VAT increase.
A preliminary assessment has shown that for some very large charities the annual cost of irrecoverable VAT can be as much as £7 million per year. Our study of 16 charities from across the sector recorded an irrecoverable VAT burden, per year, of around £30 million. This is the equivalent of one year’s income for a medium-sized charity such as Diabetes UK or the Home Farm Trust.
We have calculated that a one point rise in VAT would cost our 16 charities between £6,000 and £400,000, averaging £130,000 every year. For the 16 charities we surveyed, the total cost of a rise from the current rate of 17.5% to 20% would be an extra £5 million a year.
In order to develop a compelling case for further review of irrecoverable VAT we need your input!
Many thanks in advance for taking the time to fill in our online questionnaire or responding to the following questions:
1. What is your average annual irrecoverable VAT burden? Please provide a realistic estimate if you are not able to provide us an exact figure or are unable to separate the amount out from your charitable expenditure.
2. What would be the increase in your charity’s irrecoverable VAT burden if there was a rise in VAT from 17.5 to 20%?
3. What were your total and unrestricted incomes in your last set of annual accounts and what period does this cover?
4. Do you expect your charitable income to increase, decline or remain the same in the coming year?
5. What is your charitable expenditure in your last set of annual accounts and what period does this cover?
[Please share as much information as you can with us and, if possible, provide us with details of the total income figure in your latest accounts. At the very least we would be grateful if you could let us have an estimate of your annual irrecoverable VAT bill.]
THIS IS AN ONGOING SURVEY PLEASE DO NOT HESITATE TO TAKE PART AT ANY TIME
Given the state of the public finances, there is widespread speculation that, whatever the result of the forthcoming election, the incoming Government will decide to increase the standard rate of VAT. Under EU rules, the maximum permitted standard rate is 25%. As the UK standard rate is currently 17.5%, which is lower than the average across the EU, it has been suggested that an increase to 20% is likely.
Charities are unintended victims of the way the VAT system was designed as they are treated as the final consumer even when they are not.
Because of the risk of a VAT increase, CTG is keen to update its information on:
· The impact of VAT at present – and the % of unrestricted income that is lost in irrecoverable VAT;
· The impact of any VAT increase.
A preliminary assessment has shown that for some very large charities the annual cost of irrecoverable VAT can be as much as £7 million per year. Our study of 16 charities from across the sector recorded an irrecoverable VAT burden, per year, of around £30 million. This is the equivalent of one year’s income for a medium-sized charity such as Diabetes UK or the Home Farm Trust.
We have calculated that a one point rise in VAT would cost our 16 charities between £6,000 and £400,000, averaging £130,000 every year. For the 16 charities we surveyed, the total cost of a rise from the current rate of 17.5% to 20% would be an extra £5 million a year.
In order to develop a compelling case for further review of irrecoverable VAT we need your input!
Many thanks in advance for taking the time to fill in our online questionnaire or responding to the following questions:
1. What is your average annual irrecoverable VAT burden? Please provide a realistic estimate if you are not able to provide us an exact figure or are unable to separate the amount out from your charitable expenditure.
2. What would be the increase in your charity’s irrecoverable VAT burden if there was a rise in VAT from 17.5 to 20%?
3. What were your total and unrestricted incomes in your last set of annual accounts and what period does this cover?
4. Do you expect your charitable income to increase, decline or remain the same in the coming year?
5. What is your charitable expenditure in your last set of annual accounts and what period does this cover?
[Please share as much information as you can with us and, if possible, provide us with details of the total income figure in your latest accounts. At the very least we would be grateful if you could let us have an estimate of your annual irrecoverable VAT bill.]
THIS IS AN ONGOING SURVEY PLEASE DO NOT HESITATE TO TAKE PART AT ANY TIME
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