It proposed specific measures such as lightening Charity Commission regulation, making it more attractive for the wealthy to set up charitable trusts, clarifying rules on trading by charities and improving guidance on avoiding VAT.
But it also made general recommendations that task force members think could have more significant effects: allowing regulators to waive certain rules for some organisations and requiring public bodies to reduce their administrative burden on the sector.
Sukhvinder Stubbs, who is leading the inquiry, said it was difficult to get people in the public sector to appreciate the voluntary sector ethos and how bureaucracy undermines its contribution to society.
"Many bodies working with government find the greatest burdens come not from classic regulation but from the 'quasi-regulation' associated with government funding streams," she said. "Our recommendations will encourage those imposing the burden to be more proportionate."
Sir David Arculus, chairman of the task force, an independent body set up in 1997 to advise government on improving regulation, said: "We were disturbed to find that the voluntary sector is not able to operate on a level playing field."
The report recommends that the Charity Commission should distinguish better between legal obligations and best practice, and that annual reports and accounts should be combined with the Summary Information Return (SIR).
It adds that there is "a strong case" for amalgamating reports charities make to the commission with those they can make to the information website GuideStar, which is due to go live shortly.
Another idea is to reform the Trustee Act 2000 so wealthy entrepreneurs who put their company shares into charitable trusts do not have to diversify the shareholding to the current extent.
Further suggestions include better guidance on managing VAT liabilities and rationalising rules for checking staff with the Criminal Records Bureau.
The report also points out that charities cannot reclaim VAT on social care services, as local authorities can. It urges the Treasury and HM Revenue & Customs to work on "how this unsatisfactory situation can be improved".
- See News, page 3.