VAT rebate for charity-run hospices

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Hospices, air ambulances and search and rescue charities have been celebrating the Chancellor's announcement that, from April 2015, they will be able to reclaim the VAT they pay on goods and services. The government estimates the scheme to be worth up to £5m a year for charities.

Under the current VAT regime, government-run hospices, police rescue services and the Coastguard can reclaim VAT on various costs, but charity-run hospices, air ambulances and search and rescue services have not had the same tax privileges.  However from April, charities that provide services that the government would otherwise have to provide, will be able to reclaim VAT on costs such as equipment and fuel in the same way as their government-run counterparts.

Announcing the rebate in his Autumn Statement, George Osborne said: “Our hospice charities make an enormous contribution to our communities. They have long been subject to unfair rules that force them to pay VAT, when the NHS does not. I am today refunding the VAT that these hospice charities incur.”

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