CF charity calls for €400k tax waiver

A cystic fibrosis (CF) charity that has single-handedly funded the overhaul of facilities for CF patients in a public hospital at a cost of almost €3m has called on the Government to waive a €400,000 tax bill. 

Joe Browne, founder of Munster-based Build4Life, said it made no sense for the charity to fork out almost €400,000 in Vat when it was “essentially doing the Government’s job” by paying for a 20-bed inpatient respiratory ward at Cork University Hospital.

The charity has previously funded the building of an adult outpatient CF clinic at the hospital at a cost of about €350,000 and has fundraised the €1m needed to develop inpatient and outpatient facilities for children with CF attending CUH.

“We’ve nearly €3m given to the hospital at this stage, and we’ve created employment through the building of the new inpatient ward,” Mr Browne said.

“Yet we are expected to hand over nearly €400,000 to the exchequer, which is effectively a gift to the Government. The people who donated to our cause, including the parents and friends of those with CF, are essentially giving money to the Government for a facility they themselves failed to provide.”

Mr Browne described the Vat bill as “morally wrong” and said he intended to write to Health Minister Leo Varadkar and Finance Minister Michael Noonan to argue their case.

A retired district court judge Michael Pattwell, who has commented in the past on the irony of forcing charitable institutions to pay tax on their endeavours, said the situation Build4Life now finds itself in is farcical.

“It’s an absolute disgrace. The Government has not provided the service and yet it’s charging the voluntary sector for doing so,” Mr Pattwell said.

Kathleen Lynch, the junior health minister, said she agreed with Mr Browne’s argument against paying Vat.

“I think he’s right, especially when the charity has funded developments within an institution owned by and run by the State, which is quite unique. It’s not like they funded a standalone unit. We need to see if [the Vat bill] can be waived.”

Ms Lynch said she intends to raise the matter this week with Mr Noonan.

Legally, charitable tax exemption does not entitle an organisation to receive goods and services free from Vat. A spokesperson for Revenue said is was not possible under EU Vat law, with which Irish Vat law must comply, to introduce Vat exemption based on services received, nor to introduce an exemption based on the recipient of a service.