Charities contribute through VAT receipts, as unlike commercial organisations they are in most cases unable to reclaim VAT on the goods and services they buy. The increase in VAT to 17.5 per cent a few years ago hit charities hard; and we now have to contend with the recently-imposed VAT on recruitment advertising. Charities are an enormous source of employment, so staff contribute through PAYE and National Insurance to the Exchequer. I think it is quite possible that the Government receives more in VAT and tax receipts from charities than it loses in tax exemption.
North London Theatre Trust
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