Wexford’s Deputy James Browne has welcomed confirmation that a new VAT compensation scheme for charities will be underway from January 2019.
Fianna Fáil has been calling for the establishment of a VAT compensation scheme for charities for quite some time and the party was keen to have the scheme included in Budget changes made in 2017.
Deputy Browne said; “I welcome the fact the preparations for the scheme are now at an advanced stage. The initial overall fund of €5 million will be available to be refunded to the charitable sector in 2019 in respect of any 2018 expenditure.
“It has long been a bone of contention that much of the money raised by charities through fundraising ends up being paid to the State by way of VAT when the charity spends the money on improving their facilities.
“While the €5 million fund available for VAT refunds is modest, it represents an important start.”
Under the scheme, charities will receive a refund of their VAT costs based on the amount they receive in non-public funding. The scheme will see the compensation paid one year in arrears, so the VAT costs that charities have incurred in 2018 are applicable. The Revenue Commissioners are expected to issue detailed guidance about the operation of the scheme once the Ministerial Order giving effect to the scheme is signed into law later this month.
“I would like to commend the charitable sector for the enormous work they have put into getting this scheme up and running. I encourage every qualifying charity to familiarise themselves with the scheme and its likely benefits. The more successful the scheme is, the more likely it is to be expanded in the coming years”, concluded Deputy Browne.