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Charities celebrate VAT cut from text donations.

CHARITIES will get an extra 15% on donations made by text message after operators set up special numbers in order to waive VAT charges.

The move will mean that all registered charities big and small will be able use dedicated five digit SMS short codes beginning with 70 to avoid the amount usually charged by operators to cover the tax.

Before the move, announced today by the Mobile Data Association (MDA), only text message donations to large national charitable events such as Comic Relief were exempt.

Charities say that around 95 pence of a pounds 1.50 donation reaches them after VAT and other charges have been deducted.

When VAT is no longer charged around pounds 1.10 of a pounds 1.50 donation will go to charity.

The Charities Aid Foundation welcomed the move but called on mobile network operators to drop text message charges to allow fundraisers to get even more money from text donations.

Joe Saxton, for the Institute of Fundraising, said: "This is a giant step forward.

"Currently VAT and other charges are putting charities and donors off donating by text.

"We estimate donations from this type of giving could reach pounds 100m in five years' time - if charges come down to around 5p -10p per text in total.

"WIN, one of the companies that processes texts for mobile phone operators, has agreed to process text donations for free. What we need now is for one of the socially aware mobile phone companies like Virgin or Vodafone to take the lead in lowering their charges."

Martin Ballard, operations director of the MDA, which has driven the initiative, said: "This is a really fantastic development both for the UK charitable sector and a great example of the mobile industry collaborating for a good cause.

"Mobile is a powerful way for people to support and donate to charities and this development makes the whole process clearer for all parties.

"Sending an SMS message is known to have mass appeal because of the simple user experience across devices.

"Our hope is that reducing consumer barriers will benefit a range of charities in need of a new, modern and instant fundraising channel."
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Publication:Western Mail (Cardiff, Wales)
Date:Jul 27, 2009
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