When a homeless charity Caritas Anchor House got a VAT bill for a dizzying £1 million, it was absolutely horrified. Now it has handed in a petition to 10 Downing Street and is calling for action.
A tax status review, please
The charity is appealing to David Cameron to help save them from disaster and retain the vital moving-on accommodation they provide for as many as 230 homeless people at a time. So how did the VAT problem arise in the first place?
HMRC’s change of designation for the charity building
The charity’s building in Newham, London, had its designation changed by HMRC from a ‘homeless hostel’ to a ‘residential and life skills centre’. They did so because the charity updated the description of what it does and the services it provides on their website, even though they say the way they use the building hasn’t changed one bit.
A monster unexpected VAT bill
Caritas Anchor House was fully expecting a VAT bill of around a quarter of a million pounds, so it was shocked to open an envelope containing a demand for a million. They say the enormity of the bill will put their essential work in jeopardy.
93 of the charity’s beneficiaries signed the petition. It was presented to 10 Downing Street in the hope it’ll alert people at the very highest levels about the confusion, and to the tragedy that will probably follow.
Another example of the taxman’s heavy-handedness
It looks like HMRC’s heavy-handed approach has set the cat amongst the pigeons yet again, and they have shown very little regard for or understanding of the work the charity actually does. If HMRC insists on getting the money, vulnerable people will be put at risk for no good reason. And the local authorities will be put under even more pressure to step up to the mark and support the homeless in their area.
Appeal for a fast, fair decision
The charity is urging the government and the PM to take note of the petition, weigh up the evidence using common sense and apply a fair judgement. But it needs to happen fast before it starts to affect the homeless people being given essential support.