Claims of almost €40 million were made in the first year of the Charities VAT Compensation scheme, according to figures from the Revenue Commissioners.

The scheme, which was announced in Budget 2018, was designed to reduce the VAT burden on charities and to partially compensate them for VAT paid in running their activities.

The figures, released by Revenue today, show that in excess of 1,100 claims to a value of €40 million were made in 2018, the first year of the scheme's operation.

The fund is currently capped at €5 million per year.

Where the total amount of claims received exceeds the capped amount, charities will be refunded on a pro-rata basis.

Charity representative groups welcomed the publication of the figures but called for the cap to be raised. 

"It is noteworthy that, if the €40 million is the final figure once Revenue has carried out all checks, each applicant's payment will be approximately one-eighth of the amount they claimed, which may be a disappointment to those organisations who made modest claims," Tony Ward, CEO of the Wheel said.

"Revenue and the Department of Finance have committed to keeping the scheme under review, and given the large number of claims this year, The Wheel is urging Government to consider increasing the cap to provide a fuller rebate to charities."

That call was echoed by Charities Institute Ireland.

"While the intention has been to review the scheme after a period of three years, CII has proposed in its pre-Budget submission that the Minister review the scheme in advance of Budget 2020 with a view to increasing the annual allocation to €10 million per annum," Liz Hughes, CEO of the Charities Institute said.