Third sector tax reliefs at risk in review

List contains more than 1,000 tax reliefs that the Office of Tax Simplification will consider repealing

Russell Moore, partner, Saffery Champness
Russell Moore, partner, Saffery Champness

More than 50 different tax reliefs that third sector organisations benefit from are under review, a list from the newly formed Office of Tax Simplification has revealed.

The list contains more than 1,000 tax reliefs that the office will consider repealing or simplifying. This includes charities' exemption from paying income tax on Gift Aid income and their exemption from capital gains tax.

In practice, the number of tax reliefs that charities actually benefit from is likely to be much larger than those listed. For example, the report does not list all VAT concessions for charities separately, nor does it mention extra-statutory concessions privately agreed with HM Revenue & Customs. It also does not consider taxes levied by local authorities, such as business rates or the community infrastructure levy.

Russell Moore, a partner at the accountancy firm Saffery Champness, said the sector would have to fight hard to ensure its tax reliefs were protected in the review.

"The sector already suffers more than £1bn of VAT it is unable to recover," he said. "Any increase in this cost will be a bitter pill to swallow at a time when income is being squeezed."

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