Tax rises could cost sector a hundred million pounds, claims Charity Tax Group

Increase in national insurance and return of VAT to 17.5 per cent will hit sector hard, argues lobbying group

Tax rises announced in the pre-Budget report could cost the third sector at least £100m, the Charity Tax Group has warned.

The umbrella body, which lobbies the Government for a better deal on tax for the third sector, said a 0.5 percentage point increase in national insurance, confirmed today by chancellor Alistair Darling, would cost the sector an estimated £50m.

And the return to a 17.5 per cent level of VAT is likely to cost the sector at least as much again, the group said.

"This is money that has to be found from somewhere," said Helen Donoghue, director of the CTG. "It's money that is going to be particularly difficult to find in the current environment."

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