The Economic Secretary John Healey has written to MPs saying there will be
no extension to VAT reliefs for charities, nor will there be any introduction of
any new reliefs.
He has gone on to say that the reasons behind this refusal are 'the long standing
formal agreements with our European Partners'. However, the Charity Finance Directors
Group disputes this because earlier in the year, the Head of the European Commissions'
Indirect Tax Unit stated, 'there should be nothing standing in the way of the introduction
of systems for increased recovery of VAT by charities'.
A Treasury spokesman confirmed John Healey's statement that the Government could
not introduce charity VAT reliefs across the board, without agreement from other
EU states.
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