Hi, I’m Simon Davis, from O2’s Sustainability team.
Today we’re announcing that we’re cutting charges to ensure charities receive an extra 10p in the pound from text donations made by O2 customers from November.
Charities of all sizes will now be able to receive an estimated extra 10p in the pound for text donations of up to £10 made via dedicated 70 prefix short codes. O2 will ensure registered UK charities that opt to use a dedicated short code will receive 90 per cent of the donation. O2 charges a small fee to cover its network costs, VAT on the cost of the text message, insurance against bad debt and a range of third party costs. I think 10% is a reasonable fee to cover our costs, comparable with the fees charged by online charity giving platforms, and better value than other fundraising activities such as professional street collections, direct mailing and telemarketing campaigns.
This is in addition to the ruling that VAT is not payable on charity donations made via text message.
Charities eligible under the rules of HMRC are allocated a dedicated numeric short code for donations only. Any five-digit text message short code beginning ‘70’ is now automatically considered a charity code and becomes eligible for the enhanced payout. VAT previously charged on the donation is now passed directly to the charitable organisation. However, VAT is still payable on the operator or aggregator’s costs. Aggregators provide the application and connection to the mobile networks.
We’re glad to be able to do what we can to help charities carry on their work. O2 is pleased to lead the way in supporting charities in this way.