Labour has tabled a series of amendments to the Finance Bill to protect Mountain Rescue services from the government’s VAT hike.
Before the election, Government chief secretary Danny Alexander said; “Whatever the result on Thursday, I hope this is a policy (refunding VAT for mountain rescue services) which will be put into action”. Let’s hope the government accepts our amendment.
Here’s the background
Mountain Rescue England & Wales Taxation – Context
Overview
- Mountain Rescue is a unique emergency service dispatched through the 999 system through the police. MR provide all-terrain ambulance services; perform searches for missing persons; evacuations (eg. flooding) and specialist support in major accidents (eg. Grayrigg).
- MREW is a charity, and consists of ~3500 volunteers, operating in one of 56 teams. Mountain, Cave, Search and Fell Rescue bodies all fall under the umbrella organisation MREW. Scotland has its own umbrella organisation.
VAT, Funding and Expenditure
- The majority of funding for MREW comes from voluntary donations or lottery funding. Some police forces, primary care trusts and local authorities also make small contributions or provide facilities such as garages.
- The cost of reimbursing VAT to MREW at the 17.5% would have been £200,000 pa. For central/local government to provide the services they provide, would cost an estimated £6,000,000 pa. The new rate of VAT will cost teams an estimated further £28,500.
- Gift Aid is unavailable usually as donations are often anonymous through collection tins or otherwise. Local Resilience Forum support has been turned down several times.
- Medical supplies and ambulances are exempt from VAT, but the majority of MR expenditure is on other vehicles, fuel, equipment and clothing. The cost of clothing is often covered by members themselves, and in some teams volunteer members pay an annual fee (eg. Bolton MRT pay £100 pa each) that contributes towards equipment costs.
Other charities and Scotland
- RNLI are exempt from VAT payments on equipment and repairs.
- The Scottish Government gives an annual donation of ~£300,000 to MR, and St John Ambulance works with each MR team in Scotland to provide an ambulance. No equivalent arrangement exists in England and Wales.
Liberal Democrats
Manifesto, Election 2010, Page 83
“Refund VAT to mountain rescue services”
Danny Alexander, 4th May 2010
“It isn’t possible to put a price on the work mountain rescue teams do in the Cairngorms and all over the Highlands – not to mention the whole UK. The expertise and local knowledge which is given freely by volunteers could not be replaced.
“Everyone who enjoys our outdoors owes them a debt – and severe winter conditions like we have seen this year bring their skills into use in an even wider range of circumstances, working closely with the police.
“It has never been right that a vital service which relies on donations from the public and extraordinary commitment from volunteers gets hit by the Government for a sizeable tax payment.
“The Government has resisted calls for VAT exemption, arguing that it would not be allowed by European law, but it is absolutely clear that VAT paid could be refunded. The cost to the exchequer is small, but the difference is enormously significant for mountain rescue teams.
“Whatever the result on Thursday, I hope this is a policy which will be put into action.”
On the coalition document
“I was given very positive signals that this wasn’t the type of detail that would go in.”
“This is not one of the things we had to give way on. I am optimistic that we will get it. It is a cheap ask for something that is such great value and I can’t see why they would say no to it.
“We can get round the European Union rules and they can then claim back a grant for the same amount. We are continuing to lobby. We haven’t had a yes, but we haven’t had a no.”
Lord Greaves, 21st March 2009
In the house
“Mountain and cave rescue services in this country rescue many people and save many lives each year. It is all done on a voluntary basis and, in England, depends entirely on donations.
“It seems ridiculous that the service, which, if the Government had to step in and replace it, might cost £6m a year, is subject to VAT on its equipment and most of its spending, when the equivalent service, the Royal National Lifeboat Institution, is not.”
Parliament
EDM 250, 16th June 2010
VAT ON MOUNTAIN RESCUE EQUIPMENT
Farron, Tim
That this House pays tribute to the outstanding work undertaken by mountain rescue teams who provide essential support to emergency services in mountainous and rural areas; notes with concern that mountain rescue teams have to pay value added tax and vehicle excise duty on life-saving equipment which are exempt for other emergency services who do not have to pay taxes on equivalent equipment; and calls on the Government to exempt mountain rescue teams from these taxes immediately and pay back the estimated £200,000 it collected in value added tax during 2009.
Signatures: Tim Farron, Peter Bottomley, John Hemming, John Leech, Andrew George, Mike Hancock, Jeremy Corbyn, Ian Davidson, Jeffrey Donaldson, Mark Durkan, Margaret Ritchie, David Simpson, Ian Paisley Jnr, Nigel Dodds, Jonathan Edwards, William McCrea, Gregory Campbell, Simon Hughes, John McDonnell, Greg Mulholland, Tony Cunningham
MREW Response to Budget http://www.theboltonnews.co.uk/news/8248780.VAT_hike_will_be_uphill_struggle_for_rescue_team/
Bolton Mountain Rescue, 1st July 2001
BOLTON Mountain Rescue has hit out at the Government’s VAT increase which it says will have a “considerable impact” on the volunteer-run organisation.
From January, VAT will rise from 17.5 per cent to 20 per cent, a move which has been criticised in some quarters as “a tax on the poor”.
And the rise will affect the life-saving rescue service — which costs £25,000 a year to run and is funded entirely by public donations.
Team leader Garry Rhodes said: “In organisations like ours, the rise in VAT will have quite an impact.
“We are now losing even more money to the Government when we are providing an essential service.”
Liam is the MP for Birmingham Hodge Hill, and Labour's Shadow Chief Secretary. 
