Here's what this change means for your charity.
Previously, we charged 20% VAT on our donation fees, with some charities able to reclaim this cost. However, feedback from our charity community suggested that this was an annoying process and not all charities were able to reclaim the cost.
We have therefore implemented a zero-rating of our services in line with VAT rules. This means that VAT will be charged at 0%, so will effectively be removed from our fees. This will provide a cost saving to charities and will also eliminate a time consuming process of reclaiming VAT.
Our fees themselves will remain the same, however as VAT will now be charged at 0% rather than 20%, we will pay out a larger amount to charities.
For example, our fee for Text Giving is 5% of any donation. Previously, for a £10 donation we would have paid out £9.40 after deducting a 50p fee and 10p VAT. Now, we will pay out £9.50 as we will no longer have to deduct anything for VAT.
VAT will be zero-rated on the following fees:
VAT will continue to be charged at 20% on Text Journeys credits, though it may be possible for your charity to reclaim this cost.
You can see a full breakdown of our current fees here.
This change applies to any donations made from 1st January 2022 onwards. Fees on any donations made before this date remain subject to VAT, so you may still be charged some VAT on pay-outs in early 2022.
No. We will automatically implement this change, so there is no need to do anything.
In the short term, you may still see VAT showing on donation fees in the Donr Dashboard. We are in the process of updating our various systems to address this change, so please rest assured that this is in hand and you won't be charged VAT on any donation fees for donations made since 1st January 2022.