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2020s

The start of the decade saw the country lock down as a result of the COVID-19 pandemic and prepare for the end of the Brexit transition period.

2020

  • New research commissioned by CTG and undertaken by London Economics shows that VAT continues to place a significant burden on UK charities, with irrecoverable VAT now costing charities £1.8bn a year. The research also highlights the importance of existing VAT reliefs and exemptions for the charity sector, against a backdrop of calls for a widening of the VAT base both in response to Brexit and to pay for the cost of the COVID-19 pandemic. CTG calls for a new special charity VAT rate on purchases, to complement existing reduced and zero rates and the social exemptions.
  • CTG creates a COVID-19 information hub for charity tax and finance professionals, which collates the numerous Government announcements on the different support schemes (including furlough and business grants) available during the coronavirus outbreak. It receives over 100,000 views.
  • CTG Chairman John Hemming, writes to the Chancellor requesting immediate support for charities through the tax system during the COVID-19 pandemic. The letter presented six practical proposals to simplify charities’ interaction with the tax system and unlock important tax reliefs for charities at a time when cashflow is under serious strain.
  • Following work by CTG and the Arts Council HMRC confirms that charities will be able to claim Gift Aid on tickets for events cancelled due to COVID-19.
  • Following representations by CTG and others, HMRC confirms that charitable trusts would not be required to register with the Trust Registration Service as they were a low risk of money laundering and terrorist financing. This saved significant work for many charities.
  • Following discussions lasting three years,  HMRC accepts that VAT zero rating can be applied to certain types of online advertising, saving charities millions of pounds.
  • CTG helps charities to negotiate with HMRC to ensure valuable charity VAT reliefs are not lost as a result of buildings changing use temporarily due to the pandemic.

2021

The pandemic provided CTG with opportunities to further extend its impact as it introduced 

  • An Expert Insight Session programme: CTG has delivered nine Expert Insight Sessions this year on practical tax topics. We have had almost 1,200 participants. Recordings of these sessions are available here.
  • A new monthly newsletter: CTG has published seven editions of a new “what you need to know about charity tax” monthly newsletter. Over 200 charities, large and small, are now receiving CTG bulletins for the first time.  This newsletter is aimed at the general charity finance professional, rather than tax specialists.  Please make sure that those who you work with who would benefit from it sign up to receive it.
  • A VAT practical issues working group: This new group now gives a vital opportunity for charity staff to share best practice and discuss key VAT issues with their peers.. Members who would be interested to join the group should contact info@charitytaxgroup.org.uk.

We have submitted responses to eight consultations to HMRC and other organisations, including the Office for Tax Simplification and the Law Family Commission on Civil Society.

  • After nine months of concerted lobbying, COVID-19 business grant allowances were increased by the Government. Charities with substantial property retail, hospitality and leisure property portfolios, have been able to access up to £1m of extra funding with an additional £9m available if a range of eligibility criteria are met. The UK Government previously applied EU state aid rules that denied access to potentially business saving lockdown grants. A CTG-led coalition successfully called on the Chancellor to increase the limits as EU restrictions no longer applied. CTG has also led on the interpretation of complex rules, enabling large charity retailers in particular, to recognise these grants as income to which they are entitled.
  • The Future of Gift Aid project aims to harness the benefits of new technology and data sharing capabilities to maximise the value of Gift Aid claims made by charities. This CTG-led initiative involves charities, HMRC and intermediaries (such as JustGiving) working together.  It will help unlock £560m of Gift Aid that is unclaimed each year and reduce the £180m of Gift Aid claimed in error. Recently CTG has been involved with a presentation of the project’s work to HMRC’s head of charity policy. The progress of the project has been highlighted by the Office for Tax Simplification as a positive case study for sharing of third-party data. The project is reviewing all aspects of Gift Aid including an overdue overhaul of Gift Aid guidance to enable donors, for example, to have a better understanding of how Gift Aid works.
  • Under new proposals for Making Tax Digital for Corporation Tax a vast number of charities would be forced to report to HMRC each year for the first time. This would result in additional costs and administration, with little apparent benefit.  As a direct result of our consultation response, HMRC has engaged directly with CTG over the development of the new system.
  • HMRC confirmed that  any waivers of refunds, including waivers of loans to charities, can count as a donations which are eligible for Gift Aid. This applies as long as the agreement to waive the loan/right to a refund is clear and irrevocable. CTG is working with HMRC to design a template agreement to enable charities to apply this in practice. This positive development provides a new fundraising opportunity for charities.

2022

CTG has co-ordinated and hosted regular Expert Insight webinars.  Sessions in 2022 have included expert talks from high profile speakers on issues including:

  • A general overview on the core charity tax issues, including Gift Aid, VAT and business rates, identifying opportunities to access tax reliefs and ensure that the charities are compliant with their responsibilities.
  • When it can be helpful for charities to take tax advice
  • Specific tax considerations for smaller charities.
  • Employment tax considerations relating to holiday pay, hybrid working and opportunities to leverage salary sacrifice rules to access electric vehicles.
  • Business rates and the key things that charities need to know about them.
  • The value of promoting payroll giving within an organisation and the fundraising opportunities that come with it.

 

  • Organised and chaired practical issues VAT and Gift Aid working groups at which charities share best practice resulting in Charities saving time and money
  • Developed a strong technical case for a special charity rate of VAT on purchases, with the aim to improve charity VAT recovery and support organisations that are buying things to support beneficiaries at the front-line.
  • Co-ordinated the “Future of Gift Aid project” to help future-proof vitally important Gift Aid relief which is worth over £1bn a year to the sector. CTG has worked with charities, advisers, HMRC and intermediaries including JustGiving and Streeva.
  • Secured important changes to HMRC Gift Aid guidance in terms of recognition of donors which had been of significant concern for philanthropic giving.
  • Provided technical support to a charity preparing to take a tribunal case against HMRC, which, if successful, will save the charity sector millions of pounds each year.
  • Responded to consultations on a proposed online sales tax and hybrid working arrangements to make sure the voice of charities is heard.

2023

  • CTG has co-ordinated and hosted regular Expert Insight webinars open to all charities including, an annual update on business rates, updating members on the new VAT penalty regime and an annual update on VAT from our Technical Advisor
  • Responded to a major HMRC consultation on Charity Tax compliance.  This was focused on ensuring the charity tax reliefs are not exploited for any purpose of tax avoidance. Our response highlighted the need for proportionate reforms without unintended consequences for the vast majority of tax compliant charities. Our response was signed by a number of key infrastructure sector bodies and we worked with other groups to ensure a co-ordinated response to the consultation.
  • Organised and chaired practical issues VAT and Gift Aid working groups at which charities share best practice resulting in Charities saving time and money.
  • Continued to co-ordinate the “Future of Gift Aid project” to help future-proof vitally important Gift Aid relief which is worth over £1bn a year to the sector. CTG has worked with charities, advisers, HMRC and intermediaries. The success of this project was recognised in the HMRC Tax Administration Day in April 2023 committing HMRC to continue to work on the project.
  • Provided a consultation response to a Government rates consultation that had potential implications for charities.
  • Played a major part in ensuring that Gift Aid can still be claimed for charities that have membership schemes that are subject to The Digital Markets, Competition and Consumers Act 2024.
  • Submitted Budget representations and attended HMRC forums and working groups to ensure the interests of Charities are represented.