MP calls for end to VAT on charity donations by SMS
Howard Lake | 18 December 2007 | News
Liberal Democrat MP Mark Oaten has tabled an Early Day Motion today calling upon the Government to stop charging VAT on UK charity donations made by text. All other methods of giving to charity are VAT exempt.
Oaten argues that the levying of VAT is penalising charities for trying innovative methods of fundraising and communications, and hindering a method of giving that helps charities avoid the security issues of handling cash or the overheads associated with cards and direct debit processing.
Following the extensive use of premium SMS donations in the wake of the December 2004 South Asian Tsunami, HMRC responded to public pressure and gave a one-off donation to the appeal in compensation for the VAT charged.
Vir2 Ltd, a premium SMS company which has offices in Mark Oaten’s constituency, is hoping the Government will repeat that approach on a more permanent basis. Roger Craven, Managing Director of the company, said: “Taking 17.5% from donations made by premium SMS is clearly inconsistent and unfairly penalises smaller charities.”
Vir2 favours creating ‘VAT free’ short codes that can only be used by registered charities for the purpose of fundraising. The awarding of short codes is already regulated by Ofcom and Phone Pay Plus.
Vir2 markets premium SMS, SMS marketing and fundraising solutions to charities, hospital trusts and universities through a marketing partnership with Charity Technology Trust. It also provides mobile lottery, bingo and scratch-card solutions to Age Concern Enterprises under the Givitago™ brand name.
www.vir2.co.uk
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About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.