David Cameron to discuss charity VAT
The Prime Minister has said that charities could be funded in a
way similar to that in which the public sector is funded. His
comments were made when he was recently asked how the planned
increase in VAT from 17.5 to 20 per cent could be refunded to
voluntary organisations.
"We will want to do everything we can to help what used to be
called the third sector, and should be the first sector in my
view," said Mr Cameron. "One thing we should do is look at funding
them on the same basis the government funds itself." Currently the
government refunds VAT paid by local authorities and central
government departments. Charities have campaigned for many years to
receive the same VAT treatment. Mr Cameron said that this is
something that needs to be discussed with the Treasury.
The House of Commons recently voted against a proposal to
protect charities from the extra cost of VAT on their non-business
expenditure, which the shadow chief secretary to the Treasury
claimed could have saved the charitable sector about £70m.
It is currently estimated that charities pay more than £1billion
a year in VAT.
