VAT Compensation Refund Scheme goes live in 2019

10 Dec 2018

Introduced in Budget 2018, the VAT compensation refund scheme means charities will be entitled from 1st January 2019 to reclaim a proportion of VAT costs incurred in 2018.

The scheme is designed to compensation charities for a proportion of their VAT costs based on the level of non-public/non-statutory funding they receive.

The scheme does not apply to;

VAT incurred on private non charity related expenses,

VAT incurred that is subject to an existing refund order

VAT incurred this is otherwise deductible.

A cap of €5m has been placed on the fund for 2019. This cap will remain in place for the next three years. As the amount of claims will exceed this cap, refunds will be paid on a pro rata basis.

Claims below €500 will not qualify.

Qualifying charities must be registered with the Charities Regulator, have tax clearance and provide a set of audited financial statements for the year in which the costs were incurred.

Reminder to PAYE taxpayers to claim tax refunds before 31 December.

PAYE taxpayers are reminded that there is a four-year time limit for claiming tax refunds, hence the deadline for 2014 claims is 31st December 2018. Some of the most common reasons for tax refund claims include health expenses, nursing home fees, tuition fees, flat rate expenses, non-routine dental treatment, change in personal circumstances, etc.

The quickest way for a PAYE taxpayer to claim their tax refund is online, using PAYE Services in myAccount, or through RevApp.

PAYE Modernisation

Employers, with PAYE modernisation set to commence on the 1st January, it is important you encourage all your employees to be registered to Revenue’s PAYE services in myAccount or RevApp.

For further information in relation to the above, please do not hesitate to contact Niall Grant ( or Nicola Foster ( or alternatively you can reach them on 01- 478 6600

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