CTG press release: 27/04/05
VAT - Donations to Charities by Text Message
The Charities' Tax Reform Group (CTRG) welcomes today's announcement from Her Majesty's Revenue and Customs (HMRC) that money received by charities via text messaging ("SMS donations") should be outside the scope of Value Added Tax (VAT).
There had been speculation that VAT was due on the whole amount given by the donor, but HMRC has confirmed that it will only be paid on the charge levied by the telecom company in return for providing the text message service (approximately 25% from any SMS pledge).
Helen Donoghue, Director of the Charities' Tax Reform Group, said: "Donating by text message looks set to become an increasingly popular way for people to support charities, and we welcome this clarification of the VAT treatment of this new form of giving. We are grateful for the swift response from HMRC."
There had been speculation that VAT was due on the whole amount given by the donor, but HMRC has confirmed that it will only be paid on the charge levied by the telecom company in return for providing the text message service (approximately 25% from any SMS pledge).
Helen Donoghue, Director of the Charities' Tax Reform Group, said: "Donating by text message looks set to become an increasingly popular way for people to support charities, and we welcome this clarification of the VAT treatment of this new form of giving. We are grateful for the swift response from HMRC."