Brown hints at Budget package for charities

Government duty bound to help, PM tells faith and sector leaders

Charity umbrella groups are optimistic that this month's Budget will contain several measures that could give a significant boost to charity income.

Top of their wish list are the simplification of Gift Aid, possibly by transforming it into an 'opt-out' system, several key VAT reforms and the amendment of the troublesome anti-fraud measures concerning major donors.

The sector's optimism grew after Prime Minister Gordon Brown, speaking at a pre-G20 debate in St Paul's Cathedral last week, said he wanted to boost the efforts of charities and voluntary organisations to help with problems caused by the recession.

"There is a Budget coming up in the next two weeks," he said. "I do not want to presume what the Chancellor is saying, but I believe it is our duty to help charities at this time"

Keith Hickey, chief executive of the Charity Finance Directors' Group, said: "We're really pleased to hear Gordon Brown say this. There are a number of measures he could take that would help the sector."

Hickey said his main hope was the 'opt-out' system for Gift Aid, which would allow charities to claim tax back on all donations unless asked not to by donors.

This was supported by Helen Donoghue, director of the Charity Tax Group. Even if an opt-out system was not brought in, she said, Chancellor Alistair Darling might lighten the record-keeping requirements for charities.

She was also hopeful for a promised announcement on the reform of anti-fraud legislation concerning major donors, which she said penalised charities and was making it more difficult for them to recruit such lucrative donors.

Both the CFDG and the CTG said they wanted VAT relief to be applied to charity joint ventures - a move that would make it easier for charities to outsource back-office services.

And both supported a delay in abolishing the staff hire concession, which allows charities to pay no VAT on the wages of temporary workers.

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