Jason McCartney: Lift our vital air ambulance free from fuel tax burden

The Government’s budget included measures to alleviate this, with fuel duty being cut and the fuel duty escalator cancelled. Yet sadly, there remains an ongoing contradiction with the way that charities are taxed, something which has a significant impact on our region’s air ambulance.

A fortnight ago, I was among 170 Huddersfield Town fans who cycled the 280 miles from Huddersfield to Brighton for the club’s final away game of the season. We raised £250,000 for the Yorkshire Air Ambulance and Huddersfield Town academy via the Keep It Up campaign.

The charity that runs the Yorkshire Air Ambulance needs £7,200 every single day to keep both of its air ambulances in the air. Aviation fuel is a significant part of that cost. Last year the fuel bill alone was £150,000. As it receives no government funding, the Yorkshire Air Ambulances are dependent on voluntary charitable donations to maintain the service.

To date, the two helicopters have rescued more than 3,700 people, and cover the whole of the region seven days a week, 365 days a year. Last year Yorkshire’s Air Ambulances attended 903 incidents with 500 transfers to major treatment centres.

Their lifesaving isn’t just restricted to Yorkshire though, last June they deployed to Cumbria in response to the multiple shootings in the Whitehaven area. Yet, despite the critical work done, the charity is obliged to pay VAT on the fuel it uses.

The generous sponsorship we received on our bike ride will undoubtedly save lives, but it is immensely frustrating to think that a proportion of the money we raised will end up in HMRC’s coffers and not be spent on keeping the air ambulances in the air.

Compare this with another hugely important emergency service, lifeboats operated by another charity, the Royal National Lifeboat Institution.

Under an existing EU directive on VAT, lifeboats are exempt from paying VAT on the fuel they use. Sadly the directive does not make similar provision for other charitable activities.

Last October, I raised in a parliamentary debate the question of why air ambulances should pay VAT on their fuel, while lifeboats do not. I wrote to the Minister responsible highlighting this seeming contradiction, asking for the Government to take action.

Since then, little progress has been made and I raised the issue with David Cameron last week at Prime Minister’s Questions. Sadly it seems we are once again beholden to the EU, with the PM telling me we are unable to change the VAT Directive.

Yet change is not impossible. In 2005, a campaign led by the Kent Air Ambulance Trust won a huge VAT rebate for air ambulance charities worth up to £1m by persuading HM Customs & Excise to remove VAT on the cost of piloting helicopters.

I believe it is time for Government to find a way to reduce the tax burden on air ambulances and end the inconsistency that sees lifeboats benefit from VAT-free fuel, while air ambulances do not.

Charities have long suffered inequality around VAT, penalised by the fact that they do not charge for services and the administrative burden of reclaiming VAT.

VAT is a big issue for all charities. Under the “Places of Worship” scheme, listed places of worship enjoy a government-funded rebate on their VAT, which returns in grant aid the difference between five per cent and the actual amount spent on VAT on eligible repairs and maintenance. This was extended in the March 2004 Budget to cover the full amount spent on VAT for eligible works carried out on and after April 1 2004.

The Government has made proposals to the European Commission for a reduced VAT rate of five per cent for repairs and maintenance to listed places of worship.

The Yorkshire Air Ambulance is a perfect example of the “big society”, with the community coming together to fund a service that works alongside the NHS and other emergency services.

It is about time the Government settled the ongoing contradiction of charities paying VAT on the fuel they use where emergency services are being provided, and I for one will not take Brussels’s inflexibility as an excuse for continued inaction.

* Jason McCartney is the Conservative MP for Colne Valley.