Autumn forecast measures on shared services VAT a welcome boost for the voluntary sector

The National Council for Voluntary Organisations (NCVO) has today welcomed the measures set out in George Osborne’s Autumn Forecast statement relating to shared services VAT.  Under the proposals, a VAT cost sharing exemption will be introduced from February 2012.  The exemption removes an additional VAT charge which can arise when organisations such as charities collaborate.

Sir Stuart Etherington, Chief Executive of NCVO, said: ‘NCVO and others have long been pushing for Government to address the issue of charities not being able to recover VAT on shared services, as it presents a sizeable stumbling block to effective collaborative working.  We know from our members that there is appetite within the sector to work together more effectively and efficiently, especially in these tough times, but the additional VAT charge acted as a major disincentive, at odds with the government’s drive to encourage more collaboration.

‘We are delighted that the government is now taking action on what has been a longstanding issue.  By removing this barrier, more charities will be able to access efficiency savings and provide better services with their beneficiaries’ needs in mind.’

For more information contact Mandy Murphy in NCVO’s press office on 07714 243 942 or email mandy.murphy@ncvo-vol.org.uk.

Notes to editors:

The National Council for Voluntary Organisations (NCVO) www.ncvo-vol.org.uk is the umbrella body for the voluntary sector in England, with sister councils in Wales, Scotland and Northern Ireland.  NCVO has over 8,400 members, ranging from large national bodies to community groups, volunteer centres, and development agencies working at a local level. With over 280,000 staff and over 13 million volunteers working for our members, we represent and support almost half the voluntary sector workforce.

In September 2011, NCVO submitted a joint response to the cost sharing exemption jointly with the Charity Finance Directors’ Group (CFDG).  To view the consultation, go to the NCVO website.

NCVO and CFDG met with Exchequer Secretary David Gauke and Minister for Civil Society Nick Hurd MP on 5 September to discuss these issues.  Officials also met with NCVO and CFDG representatives on 6 October to discuss the sector’s concerns in more detail.