Cork charities ‘paying millions’ in unreclaimable VAT

October 25th, 2006

Charities in Cork are paying millions of Euros in VAT every year, according to the Irish Charities Tax Reform Group (ICTRG), which represents 140 charities countrywide. Unlike the business sector charities cannot reclaim VAT on their expenditure.

One Charleville based charity alone has been hit with recent VAT bills of almost €200,000. According to Sr Celestine Farrissey of Charleville Housing and Community Care Services, her charity paid this amount of VAT recently to develop and equip premises for elderly and those with special needs in the north Cork area.

“Everything from contractors’ and architects’ fees to essential equipment in our premises attracts up to 21% VAT. If we were a commercial business we would be able to reclaim it but as a charity we cannot. As a result we have paid the tax man the full cost of an additional house in VAT alone,” she explains.

Sr Farrissey made her comments as a group of charities in the Cork area called on the government to ‘Abolish VAT on Giving,’ the title of a campaign by the ICTRG to convince the government to compensate charities for VAT .

EU Commissioner, Mr Laszlo Kovacs, recently stated that the VAT burden on charities is unfair and that it can be relieved by way of a government grant scheme. The Danish government also recently conceded that charities there are entitled to VAT compensation.

“We want a similar commitment from our Minister for Finance. Under Section 20 of the VAT Act, 1972, he has the power to make available to charities reliefs such as compensation equivalent to the amount of VAT they pay.

“Most people are unaware that a portion of their ‘euro’ given to charities at different fundraising events is returned to the Government by way of VAT payments by the charities involved.

“Between now and the general election we will be raising this issue with TDS and candidates alike and we would greatly appreciate support from the public on the issue,” Sr Farrissey said.

ENDS

For further information contact:
John Gallagher
John Gallagher Consulting
Tel. 087.9369888