Surplus stock? Cwtch it, don’t crush it: New VAT rule makes it cheaper for businesses to donate goods than dispose of them.
Businesses across the UK will soon have a simpler, cheaper way to divert their surplus goods into communities, thanks to a major VAT change announced in the UK Budget 2025.
From 26 November 2025, companies will no longer pay VAT when donating eligible goods to registered charities. Until now, donating unsold or returned items often cost more in VAT and admin than simply writing them off and destroying them. That barrier is finally gone.
Cwtch Mawr Multibank run by local charity Faith in Families is Wales’s first Multibank. They’ve launched a new campaign, “Surplus stock? Cwtch it, don’t crush it,” to help businesses make the most of the change.
Based in Swansea and run by Faith in Families, Cwtch Mawr Multibank supported by The Multibank UK and Amazon UK, redistributes brand-new surplus items from businesses to families who need them most. Clothing, bedding, toiletries, baby supplies, household items and school essentials go straight to local partners and other charities who support people facing poverty, crisis or hardship.
The VAT change puts donation ahead of disposal, making it the most cost-effective route for managing surplus goods. For businesses holding stock due to returns, overproduction, discontinued lines or damaged packaging, the new rule removes the last financial disincentive to donate.
Cwtch Mawr already works with major companies including Amazon, Sofidel, Unilever, and L’Oréal. The charity is now inviting more businesses, warehouses and manufacturers to join the partnership.
“Companies tell us they want to donate more, but VAT made it harder than disposing of stock. This change removes that barrier completely. Surplus stock can now flow straight into Welsh homes instead of waste streams. It’s a win for families, a win for business, and a win for the planet.”
In the past year alone, Cwtch Mawr has distributed more than a million brand-new items, through 127 partner organisations. An independent evaluation shows that every £1 invested creates £5.90 in social value – making our contribution in Swansea alone worth £27.7 million worth of value to our people, pushing poverty away whilst supporting our planet.
