Revenue confirms that VAT claims of almost €49m were received in 2020 under the Charities VAT Compensation Scheme in respect of 2019
Today (10/09/2020), Revenue confirmed that over 900 VAT claims, totalling almost €49m in respect of 2019, were made by charities under the Charities VAT Compensation Scheme.
The scheme aims to reduce the VAT burden on charities and to partially compensate them for VAT paid in the day to day running of their activities. This is the second year of the scheme.
Commenting on the scheme, Ms Teresa Hearty of Revenue’s Charities Unit explained:
"Revenue accepted claims under the Charities VAT Compensation Scheme, in respect of eligible VAT paid in 2019, between 1 January and 31 August 2020. Over 900 timely claims amounting to almost €49m were made by charities during this period. Of these claims, 60% were received from charities supporting the community, 19% from religious charities, 14% from charities supporting education and 7% from charities involved in the relief of poverty.
The total amount claimed by charities under the scheme in respect of 2019 significantly exceeds the €5m annual fund cap and for this reason refunds will be paid on a pro-rata basis. This means that if all the claims submitted are found to be fully valid then each charity will receive approximately 10% of the amount claimed."
Ms Hearty added:
"Revenue is now undertaking a risk-based claims review process in respect of the scheme. This review process is ongoing and has identified some incorrect claims. Similar to last year, the main error this year relates to the inclusion of public funding in the amounts represented in the claim as qualifying income. However, the scheme only entitles charities to refunds of VAT paid having regard to their level of non-public funding. Where invalid amounts, or other errors, are identified, Revenue will contact the relevant charity to explain the reason for the reduction in their claim."
"Allowing for the completion of the claims review process, Revenue expects to pay the pro-rata refund amounts during October, Ms Hearty concluded."