Vat scheme for charities ‘will lead to improved services’

Charities reckon that the Government’s new Vat compensation scheme will add up to more and better services for people in need.

The reclaimed Vat will allow the Irish Cancer Society to fund more than 1,300 nights of palliative home care night nursing.

The Jack and Jill Foundation estimate they will be able to reclaim between €4,000 and €6,000 each month and use it to pay for up to 375 hours of home nursing care for children.

If Special Olympics Ireland can reclaim the full amount of Vat, it will cover the total cost of 290 participating athletes.

The scheme will also boost the ability of Ireland’s largest charity St Vincent de Paul to provide additional fuel, food and other provisions to the families they support.

The benefits of the scheme were outlined by Charities Institute Ireland (CII) which has more than 150 members.

Under the new scheme, charities will be able to reclaim Vat in direct proportion to their fund-raised income. CII has led the campaign for such a scheme for more than 15 years.

The Charities Vat Compensation Scheme, which has an initial allocation of €5m, will come into effect from January but will be paid one year in arrears.

Charities will be entitled to a refund of a proportion of their Vat costs on inputs, including eligible purchases, based on their non-State funding.

Pieta House reckons that up to €2,000 in Vat on its 24-hour helpline could be reclaimed each month.

The organisation supports people in suicidal distress and those who engage in self-harm. It spends €10,000 a month on running the helpline.

CII estimate that Vat costs on the new Mayo Roscommon Hospice build is €1.3m.

CII chief executive Lucy Masterson said the income of charities is broadly divided 60-40 between government and private funding: “Suppliers tend to find it incredible that it costs charities more to buy their products than it costs commercial organisations but that has been the reality.”

Ireland joins just three other countries in the EU that have introduced similar schemes — Denmark, Netherlands and Britain.