Revenue confirms refunds under the Charities VAT Compensation Scheme will issue this week
Today (22/10/2019), Revenue confirmed that refunds to over 1,100 charities who submitted qualifying claims under the Charities VAT Compensation Scheme will begin to issue this week.
In August, Revenue confirmed that claims amounting to almost €40m were made under the scheme, in respect of VAT paid in 2018. The Charities VAT Compensation Scheme, which was announced as part of Budget 2018, aims to reduce the VAT burden on charities and to partially compensate them for VAT paid in the day to day running of their activities. The scheme started in 2018 and applies to VAT paid on qualifying expenditure on or after 1 January 2018. The fund for the scheme is capped at €5m per year.
Commenting on the issuing of refunds under the scheme, Teresa Hearty, manager in Revenue’s Charities Unit explained that:
‘following the closing date for submission of 2018 claims, Revenue undertook a risk-based claims review process in respect of the scheme. As a result of the review process, some claims were adjusted, for example where public funding was included in the claim as qualifying income. The scheme only entitles charities to refunds of VAT paid having regard to their level of non-public spending.’
Ms Hearty added:
‘with the claims review process now complete, Revenue is preparing to issue refunds to charities. As the value of the VAT claims submitted by charities in respect of 2018 exceeds the annual fund cap of €5m, refunds due will be paid to charities on a pro-rata basis. This means that each charity will receive approximately 13% of the value of their claim by way of VAT refund.’
Finally, Ms Hearty outlined that:
‘it is expected that the refunds due will reach the designated bank accounts of charities over the course of the next week. As the refunds issue, charities will receive a notification to their ROS Inbox to advise the amount of the refund they have received.’