The Charities VAT Compensation Scheme

The Charities VAT Compensation Scheme deadline for submission in relation to claims for the period 1 January 2019 to 31 December 2019 has been extended from the 30 June 2020 to the 31 August 2020 on account of the pandemic.

A total annual capped fund of €5m is available for payment under the scheme which is set to run for 3 years from 1st January 2018 to 31 December 2020 where it will be reviewed. In 2019 over 1,100 claims totalling almost €40m were made by charities. 

Under this scheme, Charities will be entitled to claim a refund of a proportion of their VAT costs based on the level of non-public funding they receive. The main error in 2019 related to to the inclusion of public funding in the amounts represented in the claim as qualifying income. The scheme only entitles charities to refund of VAT paid on level of non-public funding. Where the total amount of eligible claims from all charities in each year exceeds the capped amount, claims will be paid on a pro rata basis. 

It is important to note that any claims made outside of the 31 August 2020 date for calendar year 2019 will not be accepted so it is advisable that if you haven’t already submitted a claim that you do so in the next few weeks. Click here to access the official manual and guidance issued by Revenue with regarding to making this claim. 

If you have any questions or queries in relation to this please do not hesitate to contact us.

Ronan Kilbane

Audit & Business Advisory Partner

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