Budget 2024: The Wheel Welcomes Increased Cap on Charity VAT Compensation Scheme
The Wheel, Ireland’s National Association of Charities has today (10 October 2023) welcomed the announcement that the annual cap on the Charity VAT Compensation Scheme will be increased from €5 million to €10 million.
Commenting on the announcement by Minister Michael McGrath TD in his Budget 2024 address, Ivan Cooper CEO of The Wheel said, “The increase in the annual cap will support charities to fundraise independently. This announcement is a welcome recognition of the importance of charitable fundraising in funding essential public services.”
The Government introduced the Charity VAT Compensation Scheme in 2018 to help reduce the VAT burden on charities and to partially compensate for VAT paid in the day-to-day running of these organisations.
Under an anomaly in EU VAT law charities are unable to reclaim VAT on expenditure from fundraising costs to buying a new photocopier. This scheme, approved by the EU Commission, allows partial rebates to charities, who submitted claims totalling €36.37m in 2022.