The Chancellor has confirmed that Monday 29 October 2018 will be Budget Day.

CTG’s Budget 2018 submission can be read here.

Commenting on the Budget submission, CTG Chairman John Hemming said:

“At a time when charity finances are squeezed, this Budget is an opportunity for the Government to signal clear support for the sector, in the short and long term.

“The introduction of Making Tax Digital in April 2019 presents an immediate challenge for an enormous number of charities.  Many are still ignorant of what it will mean.  A longer “soft landing” period would help charities prepare for this change. We also call on the Government to clarify that VAT zero rating is applicable to online charity advertising and make it fit for purpose in the digital age.  The current uncertainty is limiting essential fundraising activity.

“Small practical changes would produce real benefits to fundraising and charity administration with little cost to Government.  We are pushing for an increase the non-primary purpose trading limit, an increase the value of eligible GASDS donations to £30 and a de minimis limit for retail Gift Aid.

“Longer term we call on the Government to commit to a strategic review of the future VAT system and to review how charities are affected by the Apprenticeship Levy and Insurance Premium Tax.   Charity research and development could be incentivised through new tax credits which would dovetail with its  Industrial Strategy for  the post Brexit world.”

In summary we call on the Government to:

• Continue to consult the charity sector before Making Tax Digital for VAT is introduced in April 2019 and if necessary, consider an extension of the “soft landing” period.
• Facilitate discussions between charities and fundraising platforms about improving the transparency and equity of fees when Gift Aid is claimed on donations collected by intermediaries, particularly in relation to emergency and disaster appeals.
• Clarify as soon possible that VAT zero rating is applicable to online charity advertising.
• Commit to a strategic review of the future VAT system with the aim of reducing the irrecoverable VAT charities currently incur.
• Increase the non-primary purpose trading limit (miscellaneous income) from £50k per annum to £100k per annum.
• Increase the value of eligible donations under the Gift Aid Small Donations Scheme (GASDS) to £30, in line with the contactless donation limit.
• Introduce a de minimis limit so that charities do not have to contact donors when they are claiming very small sums under the retail Gift Aid scheme, making significant administrative savings and in line with feedback from donors.
• Consider tax credits to stimulate the funding of bio-medical research by charities, similar to those provided to investor owned research companies.
• Commit resources and investment to improve VAT guidance and consider extending the opening hours of the HMRC Charity helpline.
• Review the current Insurance Premium Tax (IPT) burden faced by charities and consider total or targeted relief where the insurance is required to cover activities or premises that directly relate to a charity’s objects.
• Commit to introducing Living Legacies to allow donors to give significant tax effective gifts during their lifetime.
• Confirm that the charity exemption from the Community Infrastructure Levy will be maintained and that an equivalent exemption will apply to any successor tariff.
• Allow Apprenticeship Levy funds to be used towards the costs of training volunteers.
• Commit to automatically excluding charities from any anti-avoidance legislation where it is clear they have no tax avoidance motive.