The Human Cost of VAT

Case Study

The Multiple Sclerosis Society of Ireland

Michael Dineen

MS Society – Brief Background

• MS Ireland was founded in 1961 by Dr. Robert Brian Pringle.

• The Society exists to facilitate People with Multiple Sclerosis, to control their lives and environment, to live with dignity and participate in the community.

• MS Ireland offers services to people with MS through it’s network of voluntary branches and through its full-time staff at the National Office and in the Regions

National MS Care Centre

• The national MS care centre opened in 1989 and after additional development work in 2001/2002 now provides 12 bedrooms for short-term respite care and therapy services to people with multiple sclerosis and other neurological conditions

National MS Care Centre

Bushy Park Road, Rathgar

VAT on capital expenditure

• Care centre development

• Proposed new Resource Centre

Cost of recent development, extension and refurbishment at the

Care Centre Net VAT

Building costs € 2,115 K € 265 K

Consultancy € 408 K € 85 Kfees etc Total VAT cost € 350 K

Proposed new Resource Centre

at Northumberland Road Costs are VAT inclusive

New premises € 2.15 m

Refurbishment &consultancy costs € 1.55 m

Total projected costs € 3.70 m

VAT Bill on Resource Centre refurbishments»

• VAT on building refurbishments € 162,000 @ 13.5%

• VAT on Design,Planning and Other Fees @ 21% € 32,000

• Total VAT Bill € 194,000

VAT on annual Administration Costs

•The Care Centre

• Head Office/Resource Centre

Annual VAT cost of running the Care Centre

2001 € 10,500

2002 € 22,000

2003 ( Estimated ) € 25,000

Annual VAT on MS Society costs

2001 € 183,000

2002 € 200,000

2003 ( Estimated ) € 220,000

Summary of VAT Costs Building care centre

VAT on Building costs € 265,000VAT on consultancy fees etc € 85,000

Running costs - 2002 Care centre € 22,000 Head office € 200,000

Sub-total € 572,000

Potential cost re new Resource Centre € 194,000

Total Vat cost € 766,000

Impact of the cost of VAT• Instead of providing urgently needed

services,€ 766,000 goes to the government coffers. This is wrong!!

• MS Ireland could use this money to: -– Improve community services– Increase counselling services– Provide additional informational

publications

IN CONCLUSION

MS Ireland calls on the government to

give us our VAT back!