No tax on text donations, says minister

VAT should not be charged on donations to charity made by mobile phone text message, the Government has announced.

Jane Kennedy, financial secretary to the Treasury, said that, like all other types of charitable giving, text donations were not liable for VAT. Many mobile phone networks have up to now charged VAT on a whole donation.

The confirmation came in a written answer to a question raised by Liberal Democrat MP Mark Oaten in October last year.

The matter was first raised after the Tsunami Appeal raised more than £1m in three days through a successful text-donation campaign.

The result was welcomed by Roger Craven of text donation provider Vir2. “Text donations are now comparable with other ways of collecting donations in terms of the proportion payable to charity,” he said.

“Potential donors are as likely to carry a mobile as a credit card; but, unlike credit cards, mobile phones are also a way for charities to communicate their appeals, as well as an easy and convenient means of small-value payment.”

He said that special VAT-free short codes that can only be used by registered charities should be introduced.

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