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Tax Day: What could it mean for charities?

CFG's Policy Manager Richard Sagar takes a look at what the government's 'Tax Day' on 23 March could mean for the charity sector.

Post by CFG

 

 

The government's Tax and Consultation Day went off without too much of a fanfare on 23 March, which is perhaps not surprising given the highly technical nature of the announcements.

Out of the 30+ various consultations and announcements, very few are of much interest to the sector. As one charity finance professional I spoke to commented: ‘It was all a bit of a damp squib’.

 

 

As leaked in advance by the Financial Times, the Treasury response to the ‘Fundamental Review of Business Rates’ was pushed back into the autumn, with the government instead producing an interim report which contains a summary of responses to their call for evidence.

It was promising to see the contents of our joint submission being referenced, acknowledging that a continuation of charitable rate relief, including the 80% mandatory rate, was simple, effective, and easy to apply.

Also referenced was our opposition to introducing further differentiation between charities, and our suggestion to increase funding to Local Authorities for the 20% discretionary component.

However, the alleged distortive effect on high street rents, creating a disadvantage for other tenants, didn't go unnoticed or unmentioned. As a sector we will need to correct this narrative and emphasise the benefits of charity retail to the high street and local authorities more generally.

One or two other announcements will be of interest, most notably on the expansion of the Dormant Assets Scheme, reiterating the commitment to make changes to the future Finance Bill to facilitate the inclusion of the asset groups that will be in scope of the expanded scheme. This is not brand new information, but it is still reassuring to see this confirmed once again.

A more technical change that will be of interest relates to HMRC outlining an accelerated process for VAT registered businesses to request temporary alterations to their partial exemption methods (including combined methods) to reflect changes to their business practices because of the coronavirus pandemic. More details can be found here.

Perhaps the biggest announcements relate to issues outside the scope of the sector, including a consultations on the following areas; changes to Air Passenger Duty, raising standards in the tax advice market, the tax administration framework review, and reducing the inheritance tax reporting requirements. All 30+ announcements can be found here, so you can double check if any apply to your organisation.

In summary, the key issues for our sector have been pushed back to later in the year. In addition to the upcoming Spending Review, we would expect key announcements this coming autumn which could change the financial landscape for the voluntary sector.

We will continue to demonstrate to government the vital contribution our sector makes and seek for this to be reflected in future announcements.

 

 

 

About the author

Richard Sagar leads on CFG’s policy and public affairs with a focus on tax, banking, the wider economy and Brexit. He joined CFG in 2018, having previously worked in the policy team at a membership organisation in the private sector. Prior to this, Richard was Senior Policy Officer at a Westminster think tank, specialising in energy and climate policy, authoring numerous reports and helping to advise government on energy efficiency policy. He started his working life in the charity sector in the parliamentary team of an environmental NGO.

 

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