Treasury opens consultation on VAT relief for donations

Following BRC campaigning, the Treasury has opened a consultation on the design of a VAT relief on business donations of goods to charity for distribution to those in need, or use by the charity in the delivery of their services. The consultation closes on 21 July. 

A consultation on the relief was due to be held last year, but was scuppered by the election. We have continued to call on the new government to carry forward the consultation, including in our submission to the 2024 Autumn Budget. 

At present, goods donated by a business to a charity for onward sale (e.g. in a charity shop) are exempt from VAT. However, this does not apply to goods which are donated to charities for onward donation to people in need, or for the delivery of their own services.

This anomaly has held back the volume of donations made to people in need so it is welcome to see the government consulting on aligning the tax treatment of donations made for onward sale with donations made for the onward donation. 

We will be responding to the consultation and gathering views through our Finance Community and strongly encourage members to submit their own responses to the consultation. We are working with the Treasury to organise a meeting for members with officials on the consultation and details will be shared in due course. 

For more information, please contact tom.mccarthy@brc.org.uk.