Vir2 Welcomes Backing Of Local MP Mark Oaten In Call For Charity VAT Fairness
Premium SMS is a highly effective way for charities, particularly small ones, to raise money quickly and communicate with supporters. Most charities (56%) are small operations subsisting on less than £10k per annum (1) and staffed mainly by volunteers. Premium SMS is easy to set up and does not have the security issues of cash or the overheads associated with cards and direct debit processing.
As well as penalising charities for trying innovative methods of communication and fundraising, the Government's stance is holding back small businesses like Vir2 Ltd, which has offices in Mark Oaten's constituency.
Liberal Democrat MP Mark Oaten has tabled an Early Day Motion calling on the Government to allow charity based texts to become VAT free so as to maximise the benefit of each cash donation to the charity.
Last year over £400m was spent using Premium SMS in the UK (2).
Premium SMS was first used in the Asian Tsunami appeal when over a million pounds was raised within 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: "Taking 17.5% from donations made by Premium SMS is clearly inconsistent and unfairly penalises smaller charities."
Vir2 favours a solution of creating "VAT free" short codes that can only be used by registered charities for the purpose of fundraising. The awarding of short codes is already regulated by Ofcom and Phone Pay Plus.
(1) Source: Charity Commission Survey September 2007
(2) Source: Phone Pay Plus (formerly ICSTIS) the industry regulator
Vir2 markets Premium SMS, SMS marketing and fundraising solutions to 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 by husband and wife team Roger and Gine Craven. It has grown to become a leading player in SMS marketing and Premium SMS fundraising for charities. Together with CTT, Vir2 supplies marketing solutions to over 100 charities including many well known names ranging in size from the United Nations down to a small playing field association.
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