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Government deny aid budget will fund Everybody Hurts VAT waiver
By CMU Editorial | Published on Tuesday 6 April 2010
The government last night denied reports that the tax income lost by waiving the VAT on sales of the Haiti-supporting celebrity cover of ‘Everybody Hurts’ would come from another aid budget set aside to support the post-earthquake relief effort.
As is customary for high profile benefit records, Gordon Brown said that the VAT on the Simon Cowell organised record would be waived, so that all money raised could go to the relief effort. But then The Independent last week reported that the Treasury would bill the Department For International Development for the VAT it lost on the record, so that existing aid money would cover the loss. Which would make the move to waive the VAT something of a hollow publicity stunt on the government’s part.
But a Downing Street spokesman yesterday insisted that the Indy had got its story wrong, and that while a bill would go from the Treasury to the DfID, the latter would also get extra money from the former to cover the cost of that bill. The paperwork exchange is required for some tedious admin reason but, crucially, no other aid budgets will be cut in order to fund the VAT waiving on ‘Everybody Hurts’.
A spokesman for the government insisted: “DfID will reimburse the initial cost of the VAT for the single but has an agreement with the Treasury that they will provide additional end of year financing to cover that cost. There will therefore be no impact at all on other areas of DfID’s work or budget”.
