HISTORIC PRESS RELEASE : VAT Relief for Charities´ Welfare Services to be Extended [October 1998]

The press release issued by HM Treasury on 29 October 1998.

Charities will soon be able to get VAT relief for a wider range of welfare services, such as cooking and cleaning, announced Economic Secretary Patricia Hewitt today.

Speaking at the Charities Aid Foundation conference in London, Ms Hewitt said:

“A number of welfare services – including bathing, dressing and feeding – are provided on a not-for-profit basis to the elderly, sick, distressed or disabled people, and are eligible for VAT exemption. A recent VAT Tribunal decision extended the definition of welfare services to include daily living tasks such as cooking, cleaning and laundry.  In the light of this, Customs are reviewing existing policy with a view to extending exemption to these additional services.

“This is a very welcome and sensible step forward, and we will be consulting charities on the exact circumstances in which such services will be exempt.”

Ms Hewitt stressed the importance of the growing partnership between the Government and the voluntary sector:

“The Government values highly the contribution that the voluntary sector makes to society, and the Compact between Government and this sector, due to be launched in November, will further cement the strong relationship we are building.

Turning to the Review of Charities’ Taxation,  Ms Hewitt assured delegates that the Review was making good progress:

“It is important that we give this initiative the time it needs. We received over 3000 responses from our request for ideas for the review, and we have been carefully evaluating them.”