Charity urges Deputy PM to axe VAT

Nick Clegg, Deputy Prime MinisterA NORTH East charity has made an appeal to the Deputy Prime Minister to alleviate the tax burdens of the third sector.

Nick Clegg’s ‘Your Freedom’ initiative, launched today, called on the public to nominate laws and regulations they would like to see abolished. The Government wants to use the scheme to help reduce ‘unnecessary’ laws and regulations.

One of the key areas identified by Mr Clegg was “cutting business and third sector (charities) regulation”. In response, supported housing charity Norcare has contacted the Deputy PM to ask that he look at lightening the load carried by charities in the UK by removing their obligation to pay VAT.

Charities, like businesses, are required to pay VAT on goods and services. However, unlike businesses, charities cannot claim back the tax, placing an extra cost of £17.50 on every £100 they spend.

Susan Bickerton, chief executive of Norcare, said: “With the Government making deep cuts to public sector services, it is inevitable that charities will be required to help provide support. That we must do this while also paying a tax that businesses can avoid makes the situation even more difficult.”

In the letter to Nick Clegg, Susan Bickerton points out that Norcare was obliged to pay nearly £70,000 in VAT over the past year, a figure that could otherwise have been put towards delivering front-line services to some of society’s most vulnerable people.

Susan Bickerton added: “We respect the need for the Government to raise funds in the current economic climate. However, with an imminent rise in VAT to 20%, this will mean that charities are paying a punishing extra fifth on top of their daily outgoings – money that could be better spent elsewhere.”

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