Charity pens risk being binned after Customs seeks VAT

The writing is on the wall for the free charity pen following a clamp-down by Customs and Excise.

It plans to force suppliers to charge charities VAT on pens included in fundraising mail packs which drop through the country's letterboxes.

One charity has lost £140,000 and another £50,000 in the past month because of the new ruling that VAT on pens is irrecoverable.

Mail packs sent to donors can be zero-rated for VAT, and most suppliers do not charge VAT on pens either. But following visits by Customs, many are now doing so.

Russell Moore, VAT partner with specialist accountants Saffery Champness, said the ruling was "ludicrous" and the firm planned to challenge it at a VAT tribunal.

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