Campaigners cheer charity VAT victory that ends tax anomaly
Campaigners including former PM Gordon Brown, Confederation of British Industry boss Rain Newton-Smith and David Tennant are celebrating the end of a tax anomaly that forced firms to pay VAT at 20 per cent on goods they donate to charity.
Tennant, who plays lascivious TV boss Lord Tony Baddingham in the Disney+ adaptation of Jilly Cooper’s Rivals, hailed the change, which takes effect tomorrow, as ‘an end to the cost of giving’.
New CBI analysis has calculated this will benefit charities by £72.5 million in the first year alone, based on a YouGov survey of 1,377 businesses.
Under previous rules, businesses had to pay VAT on any unsold goods they donated unless the items were exempt or zero-rated, or the charity exported, leased or sold them on.
Opening the bubbly: David Tennant with co-stars in Disney+’s Rivals
It gave firms an incentive to send surplus products to landfill or for incineration – incurring no VAT – rather than give them to needy families.
The CBI, led by Newton-Smith, has been working with The Multibank, a charity set up by Gordon Brown in 2022 to combat poverty. David Tennant is an ambassador.
Newton-Smith said: ‘This is a great example of what can be achieved when the Government and business come together to find common-sense solutions.
‘Our analysis shows this change in tax rules has the potential to make a multi-million-pound difference to charities every year, now that businesses can provide surplus stock tax-free.
‘Previously wasted items including clothes, bedding and toiletries can now be donated without paying VAT, allowing businesses large and small to make a real difference to the lives of people in need.’
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