The government has announced a new VAT scheme which will increase the amount of relief available to accident rescue charities, as part of its Autumn Budget.
The government announced it would be launching an Accident Rescue Charities Grant Scheme as part of today’s Autumn Budget. The scheme is likely to be an increase to the amount of relief available for charities delivering frontline services which might otherwise have to be provided by the state.
The Budget document said the scheme would be “a grant provided to help accident rescue charities meet the cost of normally irrecoverable VAT”.
John Hemming, chair of the Charity Tax Group, welcomed the move and said it was “encouraging” that government was extending reliefs to the frontline activities of accident rescue charities.
“It is encouraging that the government is extending reliefs for frontline activities of accident rescue charities (such as those that provide emergency paramedics and doctors) and this again highlights the importance of creating a level VAT playing field for charities.”
While there isn’t a great deal of information available on the workings of the scheme or how much it will cost, Civil Society News understands it might be an extension of the government’s 2014 Autumn Budget’s VAT rebate scheme for hospices, search and rescue charities and air ambulance. The scheme, worth £9m a year, allowed hospices and rescue charities to claim VAT on goods and services.
However a source at NCVO told Civil Society News the scheme will be a separate fund “to which charities can apply for a grant to cover VAT costs,” according to the Treasury.
Andrew O’Brien, director of policy and engagement at the Charity Finance Group, said: "The logic behind reforming irrecoverable VAT is inexorable as has been proven by the further extension of VAT rebate schemes beyond blood bikes and air ambulances to cover costs incurred by accident rescue charities.
“We'll have to see the fine print in terms of implementation, but the unintended consequences of VAT have clearly been accepted by government. Ministers need to stop tinkering with the system and undertake bold reform to make it work properly for the charities and the taxman."
CTG expect further information to be announced about the scheme by the government in the coming days or weeks.
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