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Law firm picks up Caritas Anchor House’s £1m VAT case pro bono

PUBLISHED: 08:00 28 November 2015

Caritas Anchor House boss Keith Fernett on the contstruction site of the charity's planned

Caritas Anchor House boss Keith Fernett on the contstruction site of the charity's planned "move on" flats for the homeless

Archant

An international law firm has agreed to help out embattled homelessness charity Caritas Anchor House after it was hit with a £1m VAT bill earlier this year.

A £1million VAT bill has threatened the construction of the flats in Canning TownA £1million VAT bill has threatened the construction of the flats in Canning Town

The significant sum was called in by HM Revenue and Customs (HMRC) after it changed the charity’s status from a homeless hostel to a residential and life skills centre.

It came as the Canning Town group began construction on flats to help homeless people get off the streets. Charity bosses claimed they were originally quoted £250,000 in VAT for the development and accused the government of an “assault” on the charity sector.

Law firm Simmons and Simmons has agreed to take up the case against HMRC pro bono as part of their access to justice scheme. Sam Grodzinski QC of Blackstone Chambers is also working on the litigation pro bono.

The VAT bill, which the law firm warns could rise to as much as £1.5million, has put the construction of the “move on” flats at risk.

Partner and head of contentious tax, Nick Skerrett, said: “This situation poses a serious threat to [the charity’s] services which provide enormous benefits to society and the areas in which we work.

“Through our dedicated commitment to providing access to justice to those who are most in need, we fully support Caritas Anchor House in their appeal of this application.”

Keith Fernett, chief executive of Caritas Anchor House, said: We believe we’re being unreasonably penalised for treating our clients with respect and that HMRC is not taking a balanced view of the work we do.

He added: “We have worked incredibly hard to deliver a level of service with a reliance on donations and relatively little government funding.

“We hope the team at Simmons and Simmons can reverse HMRC’s decision and allow us to continue making a huge difference to people’s lives. Otherwise our work is at risk and local authority services will be put under greater pressure.”

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