Proposed VAT relief could boost business donations to charity, says ATT
The current VAT rules are discouraging businesses from donating goods to charity, but a new relief could boost donations and help reduce waste, says the Association of Taxation Technicians (ATT).
Currently, businesses can claim VAT relief on goods donated to charities for resale, but not on goods donated for charities to use in delivering services or for onward donation to beneficiaries. The Government is consulting¹ on proposals to introduce a new VAT relief to address this inconsistency. The ATT supports the proposed relief but warns that care must be taken to ensure that businesses do not abuse it by using it to offload goods that charities do not actually want.
The ATT has also advised against setting monetary thresholds or detailed eligibility conditions. These would significantly narrow the relief’s scope, adding complexity and making it less likely to be considered by potential donors.
Jon Stride, Chair of the ATT’s Technical Steering Group, said:
“We welcome the proposed VAT relief as a positive step to encourage more business donations and reduce unnecessary waste.
“However, it’s important the relief is carefully designed to prevent it being used to offload rubbish, which could place additional burdens on the charities it’s meant to help.
“We also urge the Government not to introduce restrictive monetary thresholds or strict eligibility conditions, which would add complexity for donors and limit the relief’s potential benefits.”
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