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27 December 2005

Barrett calls for VAT breaks for charities

John Barrett, Liberal Democrat MP for Edinburgh West, today called on the Government to ease the burden of VAT for charities.

Currently, irrecoverable VAT costs charities an estimated £400 million per year and the Increase in National Insurance contributions is estimated to cost charities a further £50 million per year.

John Barrett said:

“Over the years, I have supported a number of charities in Edinburgh West and I am well aware of the fantastic service they provide for the community. However many charities are still hindered by a tax system that prevents them from achieving their full potential.

“The Government has been full of warm words for charities but sadly has often failed to translate these into action. It is high time the Government removed the remaining shackles of VAT that still hold charities back.

“Charities often provide services that statutory bodies can find difficult to provide. Often the voluntary sector plays a vital role in improving public services, it is counterproductive to tax these charities that are working to the benefit of the community.”

“With Christmas approaching many people will rightly find time to give money to help those less fortunate than themselves. When people donate to charities, they want their money to go directly to the cause they support. They do not want that money to go to the Treasury in the form of VAT. It’s time that this issue is looked at again.”

 

Notes

John Barrett has signed EDM 4 – IMPACT OF VAT ON THE VOLUNTARY SECTOR

That this house values the wide range of work and activities undertaken by charities, including those involved in hospice care, care of the elderly and youth and sports organisations; welcomes the statement in the Treasury Cost Cutting Review into the Role of the Voluntary and Community Sector in Service Delivery; that the voluntary and community sector organisations have a crucial role to play in the reform of public services and reinvigoration of civic life; notes, however, that irrecoverable value added tax has a massive impact on the ability of charities to achieve their objectives and help to deliver essential services; further notes that the irrecoverable VAT burden on charities is estimated to be at least £400 million per year and that the increase in National Insurance contributions is estimated to cost charities a further £50 million per year; and calls on the Government, as a priority, to introduce measures to reduce or remove crippling financial burdens on charities.

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This website was established while I was a Member of Parliament. The site content is being kept online as a source of information, but all forms / email have been disabled.