April 2008 - VAT windfall for animal charities

 

Animal refuge charities may be able to recover hundreds of thousands of pounds from the government following a recent VAT tribunal ruling that the sale of donated cats and dogs is zero-rated. Claims for refund should now be considered in all cases.

The sale by a charity of donated goods is currently zero-rated for VAT. However, prior to this decision, animals were considered donations only if they were directly handed over by their owners.

This meant that the sale of strays and other abandoned animals handed over by the RSPCA, wardens, the Police and  members of the general public resulted in a charge of VAT at the standard rate of 17.5%.

Gables Farm Dogs and Cats Home were successful in their argument at the tribunal that all animals given to the charity qualified as donated and therefore zero-rated when sold.

HMRC have confirmed that they will not be appealing against the decision.

Therefore charities that have accounted for and paid VAT on sales of animals which are now considered to be zero-rated should submit claims for overpaid output tax.

This decision, coupled with the recent Fleming case, means that there is scope for recovering overpaid output tax as far back as 1973.

Pets Directory has teamed up with Chartered Accounts EA Associates, 869 High Road, London, N12 8QA & T4 Tax Limited to help animal charities recover overpaid VAT.

These accountants and tax advisers already have experience of taking HM Revenue & Customs all the way to tribunal to successfully claim incorrectly paid VAT and have direct links to experienced tax counsel where required in such a claim.

There is also the possibility of claiming compound interest following the Sempra Metals case which if successful would also substantially increase the value of any refund claimed.

For more information contact Thrasos Vassiliades at EA Associates on 020 8445 5500. To visit the EA Associates website Click Here 

To visit the T4 Tax Limited website for their contact details or call John on 020 8144 9299 Click Here