Charities tend to get a raw deal on VAT. So the news that the Government will fund the VAT due on sales of the ceramic poppies is welcome.
Every tax break has to be funded. In this case the money will come from fines levied on the banks over LIBOR.
An oft quoted figure is that VAT costs charities hundreds of millions each year. That would require quite a few large fines...
A team of 11,000 volunteers will begin removing the display on November 12, with the proceeds from the sale of the poppies being split between six charities providing support to service personnel, veterans and their families.The expected VAT bill of £1.1 million from the sale of the display will be covered using some of the Libor fines collected from the banks.The Chancellor said: "Each one of these poppies brought from their Derby factory to the Tower of London represents a British soldier who answered the call from their country a century ago and made the ultimate sacrifice."Their sacrifice reminds us of the part played throughout recent times by our Armed Forces to preserve our security and freedom, and of the debt we owe them."It is therefore right that we use the fines from those who've demonstrated the worst of values to support those who demonstrate the best of values everyday."All net proceeds plus a guaranteed 10% from every £25 poppy sold will be shared equally amongst six service charities: Cobseco, Combat Stress, Coming Home, Help for Heroes, the Royal British Legion and the Soldiers, Sailors, Airman and Families Association (SSAFA).The Government's donation will be up to £1.1 million, equivalent of the expected net sum of the VAT receipts collected on sales.