# No VAT to be charged on charity donations by text

- Link: https://fundraising.co.uk/2008/03/04/no-vat-be-charged-charity-donations-text/
- Published: 2008-03-04T11:11:51+00:00
- Author: Howard Lake

**Donations to charity by text will not attract VAT, according to the Treasury. 
Jane Kennedy MP, Financial Secretary to the Treasury, confirmed this in a written
answer to a question raised by Mark Oaten MP. This stated: “Donations to charity,
including those made by text message, are outside the scope of VAT-which means that
no VAT is payable on them.”**

SMS text-based marketing and fundraising solutions provider Vir2 Ltd welcomed the
clarification. It had asked its constituency MP to raise the matter.

The practice of charging VAT on the whole amount of any donation was previously 
widespread practice amongst UK mobile networks. Vir2 aruge that removing the VAT
charge makes donation by text from mobile, for small donations, “equally as efficient
as debit or credit card”.

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Vir2 works with [Charity Technology Trust](http://www.ctt.org), the charity that
promotes effective use of technology by charities, to provide text donation facilities
to over 120 UK charities.

The campaign was headed by Roger Craven, Managing Director of Vir2 Ltd. As well 
his letter in October last year, Liberal Democrat MP Mark Oaten has also raised 
an Early Day Motion, co-sponsored by Peter Bottomley MP, calling for the removal
of VAT charges on text donations. Craven has been writing to and lobbying MPs to
support the Early Day Motion, which now has the signature of 55 MPs.

[The Mobile Data Association](http://www.themda.org) backed the campaign as did 
the [160 Characters Association](http://www.160characters.org) of mobile messaging
professionals.

The issue of VAT on text donations was first raised following the 2004 Asian Tsunami
appeal when over £1 million was donated by text in just three days. On that occasion
HMRC gave a one-off donation to the appeal in compensation for the VAT charged.

Roger Craven commented: “Text donations are now comparable with other ways of collecting
donations in terms of the proportion payable to charity. Potential donors are as
likely to carry a mobile as a credit card, but unlike credit cards, mobile phones
are also a way for charities to communicate their appeals as well as an easy and
convenient means of small value payment.”

www.vir2.co.uk

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