Charity banking 'is hit by Budget VAT rise'

Charity banking will take a hit when the new VAT rate of 20 per cent comes in from January 4th 2011, it has been said.

The Charity Tax Group (CTG) stated the rise will increase the burden already felt by charities.

’Vital work’ will be impacted upon as such organisations already feel the pressure of having to replace more social services previously offered by the state, the group asserted.

Commenting on the impact the emergency Budget will have on charity banking, the CTG’s Helen Donoghue claimed: ’We are therefore strongly urging the case for special protection for charities against this increased burden through a limited rebate scheme.’

She added while she understood the need to reduce the deficit, the VAT ’burden’ faced by charities will increase to at least £150 million a year.

The CTG lobbies on the tax position of charities and currently has more than 400 members that it represents to the government.ADNFCR-2318-ID-19857938-ADNFCR