Most notably, VAT was returned to charities benefiting from the sale of the 888,246 ceramic poppies that had been planted at the Tower of London and were then sold for £25 each.
It emerged earlier this year that £326 million of other Libor funds which had been earmarked for Forces charities had been used to plug shortfalls in ministerial budgets.
In his letter sent last month, Lord Dannatt said he wanted to remind the Government that he and the charities Remembered represents were well aware that Libor funds promised them had still not been handed over.
He wrote: “In light of the recent, and very disappointing, revelation that £326 million of the Libor money intended for charities has been used to top up central Government funds, we believe the Government needs to demonstrate fully the value placed on the service and sacrifice paid by our veterans.”
In a statement issued through the charity, Mr Ellwood said he personally wanted to ensure that the sale of Tommy figurines was exempt from VAT.
“With estimated sales expected to reach £15 million, then divided between six charities, the net beneficiary will actually be the Treasury on £3 million, with just £2 million going to each charity,” he said.
“I hope you agree, given the optics of this and the good causes supported, that there is a strong case for VAT to be exempted.”