Sector presents Budget wish list

The Charities' Tax Reform Group has said it wants Gordon Brown to take a "constructive and sympathetic view" of charities' tax dilemmas in the forthcoming Budget.

Helen Donoghue, director of the campaigning organisation, told Third Sector last week that HM Revenue & Customs should help charities rather than try to "extract every last pound of tax out of them".

She was describing a wish list of measures the CTRG would like to see included in the Budget, which will be delivered on 21 March.

"We would like to see the implementation of VAT reliefs permitted under European legislation that have not been introduced by the UK," Donoghue said.

"This includes a reduced rate on all charity outputs that are not exempt and the implementation of rules that would help those charities sharing backroom services. This would be neither expensive nor difficult."

Donoghue added that HMRC should consent to a full VAT-refund scheme.

She said: "This would cost the Exchequer between £400m and £500m a year, but it would enable the sector to play a full role in partnership with government on the delivery of public services."

In a separate move, the Charity Finance Directors' Group and chief executives body Acevo have made a joint submission of 15 demands to the Treasury in advance of the Budget.

The organisations' key requests are the abolition of irrecoverable VAT and the inclusion of Gift Aid on all income unless expressly stated otherwise.

They have also requested that the small charities trading exemption should be raised from £50,000 to £250,000.

"The tax structure is the most complicated and difficult thing facing people involved in charity finance," said Nick Aldridge, director of strategy at Acevo. "But these issues tend to slip off the agenda because they are not particularly glamorous.

"There is real frustration, especially in smaller organisations, about the amount of bureaucracy charities have to go through to arrange sponsorship or set up a trading arm."

Ernese Skinner, policy and campaigns officer at the CFDG, had further criticisms. She said: "Money is being leached from the sector to consultants and advisers in order to ensure proper compliance with legislation that is inconsistent, difficult for charities to get right and resource-insensitive."

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