The Charity Tax Group has responded to announcements related to charities included in the Chancellor’s Autumn Statement.

Commenting on the Autumn Statement, John Hemming, Chairman of CTG, said:

“The announcements that the Government will be actively seeking a zero rate on sanitary products and that sixth form colleges will be able to convert to academies to avoid paying irrecoverable VAT could have important wider implications for charities. The former indicates that there may be room for negotiation on new zero rates (including possibly charity zero rates) in the ongoing European negotiations. The latter demonstrates the distortions caused by the VAT system for organisations unable to recover their VAT and strengthens the case for VAT refunds for charities providing essential public services in competition with private and governmental suppliers.

“We note that the outcome of the business rates review has been delayed until next year although we are concerned by statements confirming that business rates retention will be devolved fully to local authorities and that the uniform business rate will be abolished. We continue to be worried that mandatory rate relief that is so vital to charities will suffer the same fate. A clear statement confirming that charity business rates relief will not be affected by this policy would help to allay concerns in the sector that this policy announcement could threaten this invaluable relief, which was worth £1.52bn to the sector in England alone last year.

“The partial exemption for charities from the close company loans to participators rules, on which we lobbied the Treasury, is very welcome – it was a clear example of charities being caught inadvertently. However, it is disappointing that it only applies from today and not on loans already in place. While most charity employers will not be caught by the new Apprenticeships Levy, some larger charities will be and the additional costs will place an additional strain on already stretched budgets.

“We also welcome confirmation that there will be a Call for Evidence on the Gift Aid Small Donations Scheme in advance of a full review in 2016. We will continue to work with officials to increase take-up of the Scheme and will be pushing for measures that help to increase accessibility to small charities including a removal of the requirement for a Gift Aid history.

“CTG has written to HMRC to express concerns at the new special 45% rate of corporation tax on restitution interest which has been introduced in the Finance (No. 2) Act 2015 and will be pushing for a charity exemption when we meet officials next week.”

Notes for editors

The Charity Tax Group (CTG) has over 500 members of all sizes representing all types of charitable activity. It was set up in 1982 to make representations to Government on charity taxation and it has since become the leading voice for the sector on this issue. CTG has persuaded successive Governments to introduce a range of tax reliefs and has also campaigned successfully to protect existing concessions, saving charities a considerable amount of money in the process.