Our call to exempt charity shops from the new Digital Services Tax

The Charity Retail Association – the UK’s only trade body for the charity retail sector – is calling on the government to exempt online charity shop donations from the new Digital Services Tax, which is introduced in April 2020.

The tax is largely in response to international digital businesses ensuring they pay tax reflecting the value they derive from UK users. However, it threatens charity shops as the sector’s online sales growth continues.

We have recently taken part in the government’s consultation on the new tax and our ask is clear:

The government should exempt platforms from the Digital Services Tax when they sell items on behalf of charities, in exactly the same way the sale of donated goods on the high street is supported through business rates relief and zero rating of VAT.

With ever increasing charity funding moving online, UK legislation must keep pace with the way its citizens’ donate to good causes in the 21st century. When people donate online via a charity shop website or digital platform, they want as much of that as possible to go to support their nominated charitable cause.

The protections currently afforded in the high street to charities and their shops must remain in place for future online activity. 

Charity Retail Association Chief Executive, Robin Osterley, said: “Charitable tax reliefs must keep up with 21st century technology and this is why we are asking for the donations our sector receives to be exempt from the new Digital Services Tax.

“People who donate online in ever increasing numbers rightly expect those funds headed towards their chosen charity and not the Treasury.”