CFDG and NCVO welcome consultation on VAT cost-sharing exemption

28th June 2011

Charity Finance Directors’ Group and National Council for Voluntary Organisations welcome the launch of the consultation on implementation of Article 132 (1) (f) of the Principal VAT Directive – the VAT exemption on sharing services. Sharing back office and other services has the potential to generate significant cost savings for charities; however, at present the addition of VAT prevents this type of collaboration from being worthwhile.

Caron Bradshaw, CEO of CFDG commented: “This represents a huge step forward in terms of making good their promise to put this exemption in place. For years CFDG has called for removal of the VAT barrier and there has been extensive lobbying by the sector on this issue. It is something many of our members feel strongly about.”

Charities are increasingly being encouraged to collaborate and find innovative ways of working together to bring greater efficiency and mitigate the effects of the challenging economic climate. Implementing the exemption is a clear, practical step the Government can take to support the sector in this endeavour.

CFDG and NCVO will be working with members, sector bodies and Government, to ensure that the interests of charities are taken on board and the exemption is implemented meaningfully. Bradshaw continued: “We have to remember that the exemption is no panacea – there are certain conditions which must be met in order to qualify. However the exemption will still be of great benefit to many charities and we are likely to see much more collaboration going forward once the VAT barrier is removed.”

NCVO and CFDG have jointly stressed the importance of VAT issues to Government, including to the Prime Minister and with Ministers in HM Treasury. Sir Stuart Etherington, Chief Executive of NCVO said: “It is essential that there is a level playing field in VAT to ensure that voluntary and community organisations are able to operate and compete on a fair basis. We have long called for government action to implement this exemption and would urge them to do so quickly and in a meaningful way”.

- Ends -

Notes to Editors:

1. CFDG is the charity that champions best practice in finance management in the voluntary sector. Our training and development programmes enable finance managers to give the essential leadership on finance strategy and management that their charities need. With more than 1,700 members, managing over £21bn, we are uniquely placed to challenge regulation which threatens the effective use of charity funds. For more information, please see www.cfdg.org.uk

2. For more information please contact the CFDG Policy Team at policy@cfdg.org.uk or on 020 7250 8347.

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