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Non-profit Making Organisations (VAT)

Volume 450: debated on Monday 16 October 2006

To ask the Chancellor of the Exchequer (1) how much VAT revenue was collected on merchandise sold by non-profit-making organisations on behalf of charities in each of the last five years for which records are available; (93492)

(2) if he will seek to allow VAT (a) exemptions and (b) reductions on merchandise sold by non-profit-making organisations on behalf of charities.

The information requested is not available. HM Revenue and Customs does not collect data on VAT relating to individual goods and services.

The sale of merchandise at certain fundraising events organised by, or to raise funds for, charities and certain non-profit-making bodies is already exempt from VAT. In addition, the sale of donated goods by a non-profit-making organisation or a charity subsidiary is zero rated when any profits from the sale are transferred to a charity.

Under agreements governing the application of VAT reliefs throughout the EU, successive Governments have agreed with European partners not to extend any existing VAT zero rates or introduce any new ones. The scope of the exemptions from VAT and reduced rates is also limited by European VAT agreements. It is therefore not possible for the Government to introduce any new VAT zero rates, or to extend the existing exemption for fundraising supplies. Similarly, our European VAT agreements would not allow a reduced rate of VAT that applied only to sales of merchandise by non-profit-making organisations on behalf of charities.

To ask the Chancellor of the Exchequer whether any special VAT exemptions have been allowed to any non-profit-making organisations not registered as charities in the last five years; and if he will make a statement. (93494)

I refer the hon. Member to the answer I gave him on 12 July 2006, Official Report, column 1845W.