Subject: Small Charities used as unpaid revenue collectors
As a small local charity with limited funds, why should we act as unpaid VAT collectors for the government?
Rarely do we hold out our hands to funding bodies, with the exception for certain capital equipment, and say 'give us some cash because we are a good cause'. Instead, we raise 99% of what we need by holding out events run for, and by our members.
This results in our having to 'contribute' almost a fifth of what we raise to H Revenue & Customs in the form of VAT on all of our essential purchases, safety equipment and fuel being the major items needed!
What do others think of this unfairness, as the large, professional charities are able to register for VAT as their turnover is well in excess of the recommended registration turnover of £50k per annum, and yet we can not reclaim a single penny.
Considering that the majority of charities are run by unpaid volunteers, do you think that this state of affaris constitutes discrimination?
I look forward to your comments.
HerbThis comment was last edited on Mar 25, 2010
A quick update on this ... Nick Hurd requested suggestions regarding what the government could do for the third sector, the sent text is reproduced below:
"Dear Mr. Hurd,
You say that you would like to help charities and community organisations.
As you may be aware, many charities and local organisations are run entirely by unpaid volunteers who spend much of their time fundraising. They strive to maintain sufficient revenues in order to continue with their work.
Unfortunately, at the moment 17.5%, and soon to be 20% of their expenditure goes directly to the government by way of VAT. This means in effect, that all of us involved are acting as unpaid revenue raisers for the Government as one fifth of our funding is immediately taken away for other purposes, and not for the benefit of those at the ‘sharp end’!
This issue has been raised with HMRC, who have stated that only charitable businesses can be registered with them and enjoy being able to claim back or offset the VAT paid.
Over 50% of charities do not have any paid employees, and although they are run as businesses, they are not out to make substantial profits through their supplying of ‘services to the community’.
I, and many others would appreciate it if you could raise this issue with the Chancellor, with a view to ensuring that all charities may be exempted from paying VAT in order to continue providing much needed services at no charge to the communities which they serve – especially in these difficult times, when funding is becoming increasingly difficult?
I look forward to your comments.
Regards,"
Might I suggets that other charities and community organisations send him something similar?
His email address is 'psnickhurd@cabinet-office.x.gsi.gov.uk'
If a politican receives two mails on the same subject, they can be ignored. However, if they receive a hundred, they tend to act!
Your cooperation in this would be greatly appreciated, as we are all suffering from the economic downturn.
Herb
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