To ask the Chancellor of the Exchequer whether Her Majesty's Government have implemented regulations under all the opportunities available under the European Economic Community value added tax directive relating to not-for-profit organisations covered under article 13 of the directive relating to the reimbursement by Her Majesty's Government of value added tax paid by such organisations and similar relief on donations listed as sales for a nominal amount to such organisations.
Article 13 of the EC sixth VAT directive includes various activities where services and goods supplied by charities or non-profit-making organisations shall be exempted from VAT.Under the normal EC VAT rules, when a business donates equipment it is required to account for VAT on the supply, but donors are not obliged to pass this VAT charge on to the recipient of the equipment.There is no provision in EC legislation for national Governments to reimburse VAT incurred by non-profit-making organisations on their exempt or non-business activities.