European umbrella bodies meet to discuss tax changes

Charities could face major VAT shake-up, says Charity Tax Group

European Commission
European Commission

Charity umbrella bodies from across Europe will meet next week to discuss how to campaign for changes in European Commission rules on public and third sector taxation.

About 25 organisations are expected to attend a conference in Brussels, where a spokesman for the European Commission will explain an EU consultation on public sector taxation.

The commission intends to carry out a strategic exercise to plan which issues the consultation should focus on, according to Helen Donoghue, director of the Charity Tax Group.

The CTG helped to draw up a survey of European charities' priorities on third sector taxation, which has been submitted to the European Commission and will feed into its preliminary work.

"This could be a major shake-up of the VAT situation for charities in the UK," Donoghue told Third Sector. "It is a considerable opportunity, but potentially a big danger.

"We need to see what we can win, but also hang on to what we have got. Charities in the UK have won a number of zero per cent concessions that are not popular with the European Commission."

Donoghue said one major area where charities hoped to win concessions was service delivery.

"We feel that if government is deciding whether to have work carried out by an in-house team or a charity, there should be equal competition," she said. "There isn't at the moment, because an in-house government team doesn't have to pay VAT."

She said the meeting would be the first step in planning a campaign to lobby the commission that would be launched formally later in the year.

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