When Stuart Savage, a Partner in our Indirect Tax team in Leeds, went online at JustGiving.com to sponsor his wife in a charity run, he delved a little deeper into the T&Cs than most people do. The site engaged his professional curiosity and after some digging he recognised that a VAT exemption might apply to the business’s activities. After meeting with the Deloitte team, JustGiving made a retrospective claim to test the exemption and after several other test cases and four years’ painstaking work with HMRC, the claim was accepted, resulting in a repayment of £3.5 million. JustGiving, despite not being a charity itself, decided to donate the entire sum to its customers, who are all charities.

The treatment agreed for JustGiving gave them a significant ‘first-mover’ commercial advantage and has subsequently been adopted by the majority of the charity-giving sector, resulting in a considerable saving for charities throughout the UK. We are now exploring whether the same VAT treatment might be possible in other countries into which the client is looking to expand.