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 on the Government to introduce 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 a campaign 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 a three-year campaign by CTG, 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.

CTG’s lobbying and influencing work has continued to produce positive results. 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.