CTG press release: 11/11/04
Chancellor's Band Aid VAT Announcement
The Charities' Tax Reform Group (CTRG) welcomed the weekend announcement by the Chancellor, Gordon Brown, that he would refund the Band Aid Trust for the VAT incurred on sales of its new DVD and the new version of the 1984 hit Do They Know It's Christmas?, as a sign that he recognises why we are campaigning for VAT reform.
Gordon Brown's ‘one-off’ gesture to Band Aid is estimated to represent a direct saving to the charity in the region of £4 million, possibly more. This is a significant sum of extra money that can now go to support the charity's work in Africa rather than going to the Treasury in the form of VAT.
What is true for Band Aid is true for the rest of us – if VAT was waived for all registered charities, there would immediately be an enormous boost to our finances. And it would not just be in direct savings; in addition to the actual VAT paid out, charities spend considerable sums of money ensuring that they are complying with the VAT system and negotiating on their VAT bills. Take away the VAT problem and beneficiaries of charities would benefit more and charities themselves would see a considerable reduction in their administrative overheads.
VAT hits charities’ fund-raising activities in all sorts of ways. That is why the CTRG is concentrating its efforts on VAT reform. We are delighted that the Chancellor has acknowledged its impact upon our sector. What is needed now, is to convert this one-off gesture into a universal measure applicable to all UK registered charities. The effect upon charities and the people they serve cannot be underestimated.
Gordon Brown's ‘one-off’ gesture to Band Aid is estimated to represent a direct saving to the charity in the region of £4 million, possibly more. This is a significant sum of extra money that can now go to support the charity's work in Africa rather than going to the Treasury in the form of VAT.
What is true for Band Aid is true for the rest of us – if VAT was waived for all registered charities, there would immediately be an enormous boost to our finances. And it would not just be in direct savings; in addition to the actual VAT paid out, charities spend considerable sums of money ensuring that they are complying with the VAT system and negotiating on their VAT bills. Take away the VAT problem and beneficiaries of charities would benefit more and charities themselves would see a considerable reduction in their administrative overheads.
VAT hits charities’ fund-raising activities in all sorts of ways. That is why the CTRG is concentrating its efforts on VAT reform. We are delighted that the Chancellor has acknowledged its impact upon our sector. What is needed now, is to convert this one-off gesture into a universal measure applicable to all UK registered charities. The effect upon charities and the people they serve cannot be underestimated.