Charities should be consulted earlier in the process of creating tax legislation, the Charity Finance Directors' Group has said in response to a Treasury consultation on improving and simplifying tax law.
In its response to Tax Policy Making: a New Approach, the CFDG said the Treasury and HM Revenue & Customs should talk to charity representatives before they embarked upon new legislation.
"The sector is rarely consulted at the outset when a new tax policy is created," said Melora Jezierska, policy officer at the CFDG. "It's often only at the later stages that the sector learns about the problems new legislation is likely to cause.
"At that stage, the sector has to put a lot of effort into sorting the problem out. It also wastes time for legislators and government officials."
Jezierska said the CFDG was lobbying the government to ensure that the potential impact on the charity sector was included in the impact assessment for any tax legislation.
Another goal of the CFDG is a more strategic approach to tax avoidance legislation, according to its response.
It said existing legislation in this area had caused "huge negative impacts for the third sector" in cases such as substantial donor legislation and the recent "fit and proper persons" test, which authorises HMRC to refuse tax relief to a charity if it believes an employee to be a fraud risk.
The CFDG has also asked for a charities tax specialist to sit on a new body of tax professionals that will meet twice a year to advise the government. The Treasury consultation closes on 22 September.