VAT On Text Message Donations

O2 has become the first network operator to put in place a new system which means charities should receive around 90% of the money donated by its customers through SMS.

Until now, due to the structure of Premium SMS, a charity would not receive the full price of a text message donation, with part of it going on VAT, network and administrator charges.

Following an agreement brokered by the Mobile Data Association (MDA) (and agreed to by mobile network operators 3, Orange, T-Mobile, Telefónica, Vodafone and O2) it was announced in July 2009 that the VAT on donations made by text message to charities registered with HM Revenue & Customs would be passed directly to the charity.

Martin Ballard, Operations Director of the MDA, who has driven the initiative, said: "This is a really fantastic development both for the UK charitable sector and a great example of the mobile industry collaborating for a good cause. Mobile is a powerful way for people to support and donate to