Fianna Fáil Spokesperson on Finance Michael McGrath has welcomed the confirmation that a new VAT compensation scheme will be up and running from January 2019 and has urged qualifying charities to make preparations to avail of the scheme. Deputy McGrath was commenting on receipt of a parliamentary reply from Minister Paschal Donohoe confirming the commencement of the scheme.

Deputy McGrath said, “Fianna Fáil has been calling for the establishment of a VAT compensation scheme for charities for quite some time and was to the fore in securing the inclusion of the scheme in the Budget over a year ago. I welcome the fact the preparations for the scheme are now at an advanced stage and that an initial overall fund of €5m will be available to be refunded to the charitable sector in 2019 in respect of their 2018 expenditure.

“It has long been a bone of contention that much of the money raised by charities through fundraising ends up being paid to the State by way of VAT when the charity spends the money on improving their facilities. While the €5m fund available for VAT refunds is modest, it represents an important start and Fianna Fáil would support the expansion of this scheme in the years ahead.

“Under the scheme, charities will receive a refund of their VAT costs based on the level of non-public funding they receive. The scheme will see the compensation paid one year in arrears, so the VAT costs that charities have incurred in 2018 are applicable. The Revenue Commissioners are expected to issue detailed guidance about the operation of the scheme once the Ministerial Order giving effect to the scheme is signed into law later this month.

“I would like to commend the charitable sector for the enormous work they have put into getting this scheme up and running and I would encourage every qualifying charity to familiarise themselves with the scheme and to explore how they may be able to benefit. The more successful the scheme is, the more likely it is to be expanded in the coming years”, concluded Deputy McGrath.