Charity Tax Group responds to Autumn Budget 2017

The Charity Tax Group (CTG) today responded to announcements related to charities included in the Budget.

CTG Chairman John Hemming commented:

“We are pleased that after several rounds of consultation HMRC has accepted CTG’s recommendation that the existing three thresholds for the Gift Aid donor benefit “relevant value test” should be reduced to two thresholds with a 5% rate on parts of donations in excess of £100 (noting the total value of the benefit that a donor can receive remains at £2,500.). This will help to avoid the problems of the cliff-edge effect that many charities currently face (and which can lead them to not claim Gift Aid at all). We now look forward to co-ordinating the sector’s efforts to revise the guidance on the donor benefit rules.

“We welcome news that the VAT registration threshold will not be decreased at this time. CTG looks forward to contributing to the planned consultation process in which we will expand on our recommendations to the OTS for re-designs to the threshold to protect charities. This could include excluding zero rated sales and allowing charities to share resources, such as staff and IT, with their trading subsidiaries, without any charges for this counting towards the VAT registration threshold.

“The extension of VAT refunds to Police Scotland reinforces the fact that there is no technical obstacle to VAT refunds, the only considerations are political will and cost. It is encouraging that the Government is extending reliefs for frontline activities of accident rescue charities (such as those that provide emergency paramedics and doctors) and this again highlights the importance of creating a level VAT playing field for charities.

“We await further details on the implications of business rates retention policies for discretionary rate relief for charities, as well as details on possible adaptations to the Apprenticeship Levy, which we hope will result in its extension to volunteer expenses. We will also continue to work with officials on MTD for VAT, as part of the pilot stage next year. We also await details of the planned consultation on the Community Infrastructure Levy (CIL) and will be making a strong case for the retention of a charity exemption”.

Notes for editors

The Charity Tax Group (CTG) has over 600 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.

You can also read CTG’s recent pre-Budget submission here.

CTG’s response to the Gift Aid donor benefits consultation can be read here.

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