Revenue & Customs are targeting charities such as village halls, playgroups and universities in order to fill a 'black hole' in Treasury finances, according to accountancy firm Kingston Smith.
Writing in Third Sector this week, VAT partner Adrian Houstoun says that a visit from the VAT man has become a "dreaded experience" for many charities.
"The Customs officer used to help you with transactions to get the right amount of VAT from the right person at the right time, even when that would not be in their interest," he writes. "Now Customs seems to look for revenue-raising opportunities even when their case is on shaky foundations."
Village halls, playgroups and universities all face challenges from VAT officers "working harder to collect more VAT," says Houstoun.
He claims the change in tactics is the result of a £9-£11bn 'black hole' in Treasury revenues and tax refund claims brought by companies such as Marks and Spencer against Revenue & Customs.
- See Finance, page 16.