Charity Tax Group calls for new VAT reliefs for charities in the Budget

The organisation also wants an exemption for charities from the insurance premium tax, the rate of which will have doubled in 18 months by June

Identifying new VAT reliefs for charities and an exemption from the insurance premium tax are among the Budget proposals the Charity Tax Group has submitted to the Treasury.

In its Budget submission, the CTG says it wants to tackle irrevocable VAT and identify instances where the modernisation of charity operations and innovations in the sector are not covered by existing zero rates.

The submission also calls for the government to review whether it would be viable to grant charities an exemption from or a reduced rate of insurance premium tax – a tax on general insurance premiums such as building or car insurance.

The insurance premium tax rate will have doubled in 18 months when a new 12 per cent rate takes effect in June.

The apprenticeship levy, which forces employers with wage bills of at least £3m to pay a levy of 0.5 per cent of their overall payroll amount to the government, also features in the CTG’s submission, with a request that charities be able to assign any unused levy credits to other charities above the 10 per cent threshold already under consideration.

The CTG also wants charities to be able to use levy funds for accredited volunteer training.

Other proposals in the submission include exemptions for charities from digital record-keeping and transfer-of-corporate-profits legislation, a review of the administrative burden of tax policies on the sector, reinstating the research and development credit for non-university charities and protection of employer-provided living accommodation exemptions.

John Hemming, chairman of the CTG, said: "The Budget presents an important opportunity for the government to demonstrate its continued support for charities.

"As tax policies are developed, we urge officials to continue to consult key stakeholders, to avoid unintended consequences and identify important opportunities for simplification of the tax system for charities."

The Budget is due to take place on 8 March. 

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