Over 9,000 charities will today share a rebate of £3.37 million secured by online fundraising service JustGiving after it successfully challenged HMRC over whether VAT should be paid on transaction fees on donations.
The money will be received by charities that raised funds online using JustGiving between 1 September 2004 and 31 December 2010. They do not have to remain JustGiving members now in order to receive their share of the rebate.
JustGiving began its challenge to HMRC in September 2007 who conceded the point three years later. Consequently JustGiving stopped charging VAT on transaction fees on 1 January 2011. It has taken 18 months to agree the amount of rebates that were due to charities.
The change applies to all providers of online fundraising services, meaning that they do not have to charge VAT on transaction fees either. JustGiving on the other hand acknowledge that the change will increase its own costs by about 6% in that it won't be able to reclaim the VAT on its costs in full.
Anne-Marie Huby, Managing Director for JustGiving, said: “We are proud to have achieved this change for the benefit of all charities using online fundraising platforms.”
JustGiving will be rebating the sum it has received from HMRC, less the professional fees it has incurred in making the challenge. The net sum to be received by charities is £3,368,019.83.