Homeless charity wins landmark battle over tax

CARITAS ANCHOR House has won a landmark battle against HM Revenue and Customs that will enable the charity to open 25 new flats for homeless people in London.

The charity spent a year fighting a £1 million VAT bill for property it owned in Newham, in east London. Despite intending to use the building for “move-on” flats for homeless people, HMRC changed the designation of the site to a “residential and life skills centre”, which altered its VAT status.

The chief executive of Anchor House, Keith Fernett, told The Tablet that a broad alliance of politicians, celebrities and supporters helped him convince HMRC to reverse its decision.
He said  he had attended meetings with HMRC alongside Caritas Anchor House supporter Stephen Timms MP, former Chief Secretary to the Treasury.

However, he said that fighting the ruling had incurred costs in excess of £1m; one donor had pulled their £500,000 gift because they wanted to support the charity’s work with the homeless, not pay its VAT bill.