Surplus food tech platform Neighbourly has welcomed the Government’s VAT relief for business donations of goods to charities.

The new policy is set to take effect on 1 April 2026.

Although the Autumn Budget did not specifically mention food (it is more general relief for business donations of goods to charity), the decision will allow retailers and businesses to donate surplus food without facing additional tax charges.

 Zoe Colosimo, COO at Neighbourly, said: “Community organisations are under enormous pressure; our latest research revealed that almost four in five (79%) organisations have seen an increase in demand for services over the past six months

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“Removing this friction means surplus can flow more easily from retailers and manufacturers to local charities, rather than to waste streams. This measure will go some way to helping businesses turn surplus donation into a mainstream ESG strategy, with businesses able to donate more confidently and at scale. We expect this to unlock significantly more clothing, household, and product essentials for the communities that need them most.”

The Government’s objective is to simplify and streamline the donation process in order for more businesses to be able to give away surplus food.

Neighbourly is a “tech for good” platform that works with organisations to deliver social impact through local giving, volunteering and surplus redistribution.

Retailers, including major supermarket and retail chains, may now find it more feasible to increase the volume of surplus food or goods donated under the new policy

Colosimo added: “For companies working with Neighbourly, this means there are fewer barriers and more opportunity to do the right thing, making it simpler than ever to convert valuable surplus into traceable and demonstrable social value, creating a real and positive impact in our communities.”