Chancellor George Osborne announced today that the government is to refund the expected VAT of up to £1.1m from the sales of poppies used at the First World War commemorative installation at the Tower of London.

Using some of the LIBOR fines collected from the banks, the government will donate an amount equivalent to the expected net VAT receipts from the sale of the poppies to six charities who support injured armed services personnel and their families.

Cobseo; Combat Stress; Coming Home; Help for Heroes; The Royal British Legion; and Soldiers, Sailors, Airman and Families Association will benefit from the donation.

Osborne said each poppy at the Tower of London represents a British soldier who answered the call from their country a century ago and made the “ultimate sacrifice”.

“Their sacrifice reminds us of the part played throughout recent times by our armed forces to preserve our security and freedom, and of the debt we owe them. It is therefore right that we use the fines from those who’ve demonstrated the worst of values to support those who demonstrate the best of values everyday.”

All net proceeds plus a guaranteed 10 per cent from every poppy sold will be shared equally amongst the charities. The government’s donation will be up to the £1.1m equivalent of the expected net sum of the VAT receipts collected on sales, refunded in the form of a charitable donation.

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