FINANCE NEWS: Tax reform group's survey expected to reveal VAT growth

The Charities Tax Reform Group has sent a questionnaire to its 375 members to ascertain the true cost of VAT to the sector.

The last time the group attempted to estimate charities' irrecoverable VAT burden was in 1995, when a figure of £400 million was proposed and later endorsed by independent research consultancy London Economics.

Russell Moore, VAT specialist at accountants Saffery Champness, claimed last month that the sector's VAT bill was now close to £1 billion. But the reform group says it does not have the evidence to back up this assertion.

"We can't substantiate these figures,

said administrator Helen Donoghue. "But it is conceivable that the real figure is higher than previously quoted. Charitable expenditure has increased since then so the VAT position has inevitably worsened."

Members have been sent a detailed questionnaire with a deadline for responses of the end of April. "We hope this will give a much better profile of exactly what VAT charities are incurring, and the type of purchases they make. It is complicated but we are urging people to fill in as much of it as they can,

Donoghue said.

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