Charities VAT Compensation Scheme claims of almost €49 million

Sep 14, 2020

Revenue confirmed that over 900 VAT claims, totalling almost €49 million, were received in respect of 2019 from charities under the Charities VAT Compensation Scheme. This is the second year of the scheme which is aimed at reducing the VAT burden on charities by partially compensating them for VAT paid in the day to day running of their activities.

Revenue has detailed that of the claims made

  • 60 percent were from charities who support the community;
  • 19 percent were from religious charities;
  • 14 percent were from charities supporting education; and
  • Seven percent were from charities involved in the relief of poverty.

As the amount claimed under the scheme in respect of 2019 significantly exceeds the €5 million annual fund cap, Revenue will be paying the refunds on a pro-rata basis during October. Where a claim is valid, charities will receive approximately 10 percent of the amount claimed.

Commenting on the scheme through a press release, the Revenue’s Charity Unit explained: 

“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."