Eight sector leaders have urged George Osborne, the Chancellor of the Exchequer, to use his summer Budget to raise public awareness of Gift Aid, give charities 100 per cent mandatory rate relief and introduce a more favourable VAT regime.
On Wednesday, Osborne will present the first Budget statement read to a majority Conservative government since 1996, and he has already received a representation from Sir Stephen Bubb, chief executive of the charity leaders group Acevo.
On Friday, a separate letter was sent to the chancellor signed by Debra Allcock Tyler, chief executive of the Directory of Social Change; Tony Armstrong, chief executive of Locality; John Barrett, acting chief executive of the Small Charities Coalition; Caron Bradshaw, chief executive of the Charity Finance Group; Neil Cleeveley, chief executive of Navca; David Emerson, chief executive of the Association of Charitable Foundations; Peter Lewis, chief executive of the Institute of Fundraising; Kunle Olulode, director of Voice4Change England; and Asheem Singh, director of public policy at Acevo.
It says: "Reflecting the government’s commitment to supporting charities and building further on the culture of giving in the UK, we outline the following six recommendations."
Three of those six relate to Gift Aid, namely supporting the sector in "identifying how best to raise public awareness of Gift Aid", bringing forward the review of the Gift Aid Small Donations Scheme – this is currently scheduled for spring 2016 – and investigating "ways to maximise the benefit to charities of Corporate Gift Aid".
The remaining three recommendations are the introduction of a 100 per cent mandatory rate relief for all registered charities, the initiation of "discussions on a sector-wide rebate to reduce irrecoverable VAT" and improving the VAT exemption for shared services.
The letter says "hundreds of millions of pounds worth of donations" would be eligible for Gift Aid that is not being claimed, and improved public understanding of the scheme would mean more claims.
It says there has been "mixed evidence around the efficacy of changes to corporate Gift Aid" and the disappointing take-up of the GASDS means it should be reviewed "as soon as possible" in order to ensure it is used by as many charities as possible.
The rate-relief recommendation mirrors a proposal in the submission by a number of the same charities to HM Treasury’s consultation on business rates, which closed last month.
The letter says that irrecoverable VAT is estimated to cost charities £1.5bn annually and the rebates for certain charities announced in the March Budget "only scratch the surface" of the issue, which the signatories argue can be tackled by the UK government despite EU rules on VAT.
The letter welcomes a measure in the Finance Act 2012 to reduce VAT on shared services, but says it has been too complicated in practice for many charities to take up.
The letter concludes: "Removing tax barriers for charities is one way that the government can help charities and ensure that as much of the money raised as possible goes towards delivering their objectives. The measures outlined above will empower charities to channel any additional resource to delivering public benefit."