Oral question asked in the House of Commons, by Celia Barlow (Labour). It was answered on Tuesday, 23 October 2007 on behalf of the Chancellor of the Duchy of Lancaster.

Community Organisations

Question: I thank my hon. Friend for his answer. In Hove and Portslade in my constituency, the Sussex multiple sclerosis treatment centre, a charitable organisation set up and run entirely by MS sufferers, was charged VAT on its building work to enlarge its centre. We were eventually able to get the VAT written off, but does my hon. Friend agree that it would be of particular benefit to all charitable organisations if there was VAT exemption for such third sector organisations?

Answer: I congratulate my hon. Friend on achieving the write-off. In any application for a local authority grant to pay for refurbishment or repairs, third sector organisations are very much encouraged to include the costs of VAT, so that every such organisation gets the full cost recovery from grants of that kind. On the wider question, there is a generous package of tax relief and tax exemptions for charities, but broader questions about VAT are a matter for the Treasury. I shall bring her point to the attention of my Treasury colleagues.

Secondary information