The Institute of Chartered Accountants in England and Wales (ICAEW) has expressed support for the new VAT relief for donated goods but has made a series of recommendations.
The ICAEW’s support follows the launch of a UK Government consultation on 28 April 2025, aiming to expand the relief for goods donated to charities.
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Currently, businesses can zero-rate goods donated to charities only under limited conditions.
The government seeks to broaden this relief, contingent on safeguarding it from misuse.
The ICAEW has responded to this consultation through ICAEW Representation 55/25, offering insights to ensure the relief’s effective implementation.
The institution said that it is typically not in favour of creating or extending VAT reliefs.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataHowever, it recognises the necessity of action in this instance.
Its response aims to facilitate a practical, proportionate and administratively simple introduction of the new relief.
The ICAEW suggests limiting the relief to donations to bodies with charitable status, providing a clear boundary.
Additionally, it recommends a certification system to prevent placing the burden on donors to determine the use of goods.
It has advised against value thresholds or categorising eligible goods as these measures could introduce complexity and limit flexibility.
The ICAEW also cautions against restrictions based on recipient characteristics or the use of goods in service delivery.
The Institute of Chartered Accountants of Scotland (ICAS) has also echoed support for a relief system that balances administrative ease with measures to prevent abuse.
The ICAS suggests a focus on registered charities, potentially using a certification process to mitigate misuse concerns.
Recently, both the ICAEW and ICAS have voiced concerns over the UK Government’s delay in the audit reform and corporate governance bill.
Initially promised for the current parliamentary session, the delay has raised questions about the government’s commitment to auditing sector reforms.
Business Minister Justin Madders cited a heavy legislative schedule as the reason for the delay in a letter to the House of Commons Business and Trade Committee.
