Partner Article

Charities unaware of energy discounts

Many charities are unaware that the energy they use is subject to a reduce 5% VAT rate, and exempt from the Climate Change Levy.

Research from Make It Cheaper, suggests that £78m in unnecessary tax will be paid by charities this year, as 46% of them do not know about the discount.

Over two-thirds are unaware that they can also claim a rebate for incorrect payments made over the past three years.

It is estimated the total reclaimable amount could be as high as £145m, as charities simply have to sign a declaration form and send it to their supplier to qualify for the exemptions.

Jonathan Elliott, managing director of Make It Cheaper, said: “There’s and awful lot of money being prevented from going to good causes quite unnecessarily.

“The rising cost of energy already takes a big bite out of budgets at a time when many charities are dreaming of a windfall.

“Worst hit are the smaller ones, often run by volunteer treasurers with little accounting experience.

“Whilst it’s HMRC that benefits from overpayments, the energy companies are not exactly absolved from blame and could be doing more to help their charity customers.”

He went on to say there were cases of organisations successfully applying for a rebate, only for their supplier to subsequently start billing the full VAT amount again because of an administrative error.

There are a number of successful case studies, including the Bosco Society in Bootle, who received a £2000 rebate which funded accommodation for homeless people with a history of drug abuse.

The Society for Abandoned Animals in Manchester also managed a £1,200 yearly saving, which has gone towards veterinary bills, vaccines and microchips.

This was posted in Bdaily's Members' News section by Tom Keighley .