Calls for Tax Exemption for Charity Sms Donations

Vir2, a provider of SMS marketing and fundraising solutions for charities, has welcomed the decision by UK politican, Mark Oaten MP to file an Early Day Motion calling upon the Government to stop charging VAT (sales tax) on UK charity donations made by SMS. All other methods of giving to charity are VAT exempt. Premium SMS texts are a particularly useful way of collecting money quickly, but the Government are not treating it the same as other methods.

As well as penalising charities for trying innovative methods of communication and fundraising, the Government's stance is holding back small businesses like Vir2, which has offices in Mark Oaten's constituency.

Liberal Democrat MP Mark Oaten has tabled an Early Day Motion calling on the Government to allow charity based texts to become VAT free so as to maximise the benefit of each cash donation to the charity.

Premium SMS was first used in the Asian Tsunami appeal when over a million pounds was raised within 3 days of launching the text campaign. On that occasion, the government's Revenue and Customs office backed down in the face of overwhelming public pressure and gave a one off donation to the appeal in compensation for the VAT charged.

Roger Craven, Managing Director, Vir2: "Taking 17.5% from donations made by Premium SMS is clearly inconsistent and unfairly penalises smaller charities."

Vir2 favours a solution of creating "VAT free" short codes that can only be used by registered charities for the purpose of fundraising. The awarding of short codes is already regulated by Ofcom and Phone Pay Plus.

Posted to the site on 18th December 2007

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