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Charities (VAT)

Volume 523: debated on Tuesday 8 February 2011

6. If he will take steps to allow charities providing services transferred to them by the NHS to recover value added tax. (38623)

Charities, voluntary sector organisations and social enterprises make a valuable contribution to our communities. That is why the Government provide about £3 billion in tax relief for charities. There are no plans to change the rules which govern the recovery of VAT by charities.

I thank my hon. Friend for that answer. The current thrust of Government thinking is that more hospices and end-of-life care services will be delivered by organisations such as Sue Ryder Care, which runs the excellent Wheatfields hospice in my constituency. When it is run by the NHS, as it is currently, it can recover 48% of VAT on non-business supplies, yet when it is transferred to organisations in the charitable sector such as Sue Ryder, it cannot. That is an anomaly that will damage the thrust of Government thinking. Will my hon. Friend meet me and representatives of Sue Ryder to discuss this matter?

I will happily meet my hon. Friend to discuss it. The VAT that is paid and the VAT that is recovered is taken into account in the funding of the NHS. There are difficulties in trying to resolve this issue without imposing an impractical and complex solution. That is why the focus tends to be on providing tax relief on charitable giving rather than on expenditure incurred by charities.