Charitable Donations via SMS
Charities often receive donations via a mobile phone using SMS short codes. This type of charitable donation is made by sending a text message with a short code specific to the charity. The amount representing the donation is then debited to the individual’s bill or pre-paid phone credit.
Charitable donations are not deemed to be consideration for a supply and are therefore outside the scope of Value-Added Tax (VAT). The provision of telecommunications services is liable to VAT at the standard rate.
The VAT treatment of the donation depends on whether the telecommunications provider charges a fee for facilitating the transaction.
Further guidance contains more detailed information on the VAT treatment of charitable donations via SMS.