Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Senator. With regard to the VAT compensation fund for charities, the Senators will be aware I announced my intention in budget 2024 to increase the size of the fund from €5 million to €10 million. The background to the scheme is that it was originally introduced in budget 2018 to reduce the tax burden on charities and partially compensate them for the VAT incurred in delivering on their charitable purpose. Under the scheme, charities are entitled to claim a refund of a proportion of their VAT costs based on their level of non-public funding. Where the total amount of eligible claims from all charities in a year exceeds the capped amount, claims are paid on a pro ratabasis. Since the start of the scheme this has resulted in payments between 12% and 17% of the total claims. As an increase in the fund to €40 million would represent a further €30 million on top of the already announced increase, it would represent a significant cost to the Exchequer. Any changes to the fund for the VAT compensation scheme will be considered as part of the normal budget process. I reiterate we are doubling the amount in the fund in this budget. I will of course consider in future budgets what potential there is to go further than that.