VAT Victory For Charity Sector

(www.AllPayNews.com) - Vir2 Ltd, the UK's leading provider of SMS text based marketing and fundraising solutions for charities, today welcomed the written answer from the Treasury which states that VAT should not be charged on charity donations made by text.

The clarification came from Jane Kennedy MP, Financial Secretary to the Treasury, who, in a written answer to a question raised by Vir2 Ltd's constituency MP Mark Oaten, stated: "Donations to charity, including those made by text message, are outside the scope of VAT-which means that no VAT is payable on them."

Text donations are a highly effective way for charities, particularly small ones, to raise money quickly and to communicate with supporters. The practice of charging VAT on the whole amount of any donation was previously widespread practice amongst UK mobile networks. Removing the VAT charge makes donation by text from mobile, for small donations, equally as efficient as debit or credit card.

Charity Technology Trust (www.ctt.org), a UK registered charity dedicated to promoting effective use of technology by charities, has worked with Vir2 to become the leading provider of text donation facilities in the UK with over 120 charities using the service.

The result is a victory for Roger Craven, Managing Director of Vir2 Ltd (www.vir2.co.uk) who initiated the campaign and the Liberal Democrat MP, Mark Oaten, who together have been lobbying hard to achieve a clarification. Jane Kennedy's response was to a letter Mark Oaten wrote in October last year. Mark has also raised an Early Day Motion, co-sponsored by Peter Bottomley MP, calling for the removal of VAT charges on text donations. Vir2 have been writing to and lobbying MPs to support of the Early Day Motion, which now has the signature of 55 MPs.

The Mobile Data Association (www.themda.org) have also backed the campaign as did the 160 Characters Association (www.160characters.org) of mobile messaging professionals.

Last year, an average of 1billion texts were sent every week and over the whole year £400m was spent using mobile premium SMS in the UK[1]. The subject of VAT on text donations were first raised as an issue in the Asian Tsunami appeal when over £1 million was raised in just 3 days of launching the text campaign. On that occasion HMRC backed down in the face of overwhelming public pressure and gave a one off donation to the appeal in compensation for the VAT charged.

Roger Craven, Managing Director, Vir2 Ltd: "Text donations are now comparable with other ways of collecting donations in terms of the proportion payable to charity. Potential donors are as likely to carry a mobile as a credit card[2], but unlike credit cards, mobile phones are also a way for charities to communicate their appeals as well as an easy and convenient means of small value payment."

"VAT free" short codes that can only be used by registered charities for the purpose of fundraising are, in Vir2's opinion, the best future solution for the sector. The political head of steam that this campaign has built up has also been good for raising awareness of the potential uses for mobile technology in the third sector.

"Vir2 looks forward to working on behalf of our charity clients with PhonepayPlus and the Mobile Data Association on the appropriate implementation mechanisms that will give confidence to charities and trust to donors alike" said Roger Craven, Managing Director, Vir2 Ltd.

[1] Source: Mobile Data Association & Phone Pay Plus (formerly ICSTIS), the industry regulator.

[2] Source: Vir2 based on 68m debit and 69m credit cards in circulation in the UK (APACS) and 69.7m active mobile phones (Ofcom)

NOTES TO EDITORS

About Vir2

Vir2 markets Premium SMS, SMS marketing and fundraising solutions to business and the third sector.

Vir2 has an agreement to supply charities, hospital trusts and universities through a strategic marketing partnership with Charity Technology Trust ("CTT"). CTT is a charity that aims to improve the efficiency of the charity sector through the better use of technology. (www.ctt.org)

Vir2 also has an agreement with Age Concern Enterprises to provide mobile lottery, bingo and scratch card solutions marketed under the Givitago(tm) brand name.

Vir2 is a limited company founded in 2005. It has grown to become a leading player in SMS marketing and Premium SMS fundraising. Together with CTT, Vir2 supplies marketing solutions to over 120 charities including many well known names ranging in size from the United Nations down to a small playing field association.

Contact: Roger Craven,
07802 702 493
Email: rogerc@vir2.org

http://www.vir2.co.uk

Vir2 Ltd, Queens Lodge, Bridge St, Wickham, Hampshire PO17 5JJ

About Charity Technology Trust

Charity Technology Trust (CTT) (http://www.ctt.org/) is a registered UK charity (number 1073954) formed in 2001. It is the only UK registered charity devoted to improving charity efficiency using new technology. CTT works with over 350 UK charities, providing a range of fundraising, campaigning and communications services.

CTT has an agreement to supply charities, hospital trusts and universities through a strategic marketing partnership with Vir2 Ltd.

Contact: William Hoyle,
0845 4561823
Email: William@ctt.org

Charity Technology Trust,
2nd Floor, Downstream Building, 1 London Bridge
London SE1 9BG