Gift Aid and VAT law on Budget wish list

Charity finance experts are hoping that changes to charity tax legislation and Gift Aid regulations will feature in today's pre-Budget report.

Nick Kavanagh, finance director at Save the Children UK, said that Chancellor Gordon Brown should allow charities to redeem Gift Aid on all donations, that the Treasury should abolish irrecoverable VAT and that charity trading law should be clarified.

Rohan Hewavisenti, director of finances and resources at Breast Cancer Care, said he believed the Government needed to address problems caused by the bureaucracy in the current tax system.

"This is an extremely complex and confusing area to navigate," he said.

"And as a sector, we currently lose £500m in irrecoverable VAT each year."

A spokeswoman for the Charity Finance Directors' Group called for provisions to allow HM Revenue & Customs to recognise the possibility that Gift Aid declarations can be lost through genuine error, and therefore to allow a mistake rate of 2 per cent on Gift Aid audits before retrospective claims are made.

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