§ Mr. Nicholas Wintertonasked the Chancellor of the Exchequer if he will estimate the number of charities 113W which would benefit if relief for charities from value added tax were introduced; and what loss in revenue this would occasion.
§ Mr. Bruce-GardyneThe vast majority of charities are not registered for VAT. The comparatively few charities whose business activities are on a scale which requires them to be registered for VAT can recover as input tax the VAT paid on their business purchases. I assume the form of VAT relief my hon. Friend has in mind is a refund to all charities of the VAT incurred on their non-business purchases.
It is not possible to say with accuracy how many charities would benefit by such a relief. Some 142,000 charities are registered with the Charity Commission for England and Wales, whilst many other bodies—including some 60,000 churches and congregations—are not required to register. Taking into account the charities in Scotland and Northern Ireland, it is possible that the total number of charities in the United Kingdom could be as high as 250,000. Information about the pattern of expenditure of these bodies is very limited, but it is possible that at least 100,000 would put forward claims to benefit from this kind of relief.
No statistics are collected centrally on charities' income or expenditure and it is impossible to give a reliable estimate of the revenue that would be lost by introducing this VAT relief.