In its 2024 Budget Submission, the Charity Tax Group (CTG) has called for the following measures to support the charity sector:
Measures that we believe can be implemented in the short term
- The extension of VAT relief to product donations for the direct support of UK charity beneficiaries in addition to those based overseas and to charities supplying donations to people in need.
- The replacement of the Listed Places of Worship Grant Scheme with a more straightforward VAT zero rating for relevant repairs or the extension of s33 relief to replace the matching grant scheme.
- The increase in the following thresholds in line with inflationary changes since they were last reviewed:
-The charities small scale non-charitable trading exemption (section 480 CTA 2010 and section 526 ITA 2007)
-De minimis (relevant value) limit on Gift Aid benefits provided in consequence of the making of a charitable donation (section 197 CTA 2010 and section 418 ITA 2007)
-The £8,000 Gift Aid Small Donations Scheme top up limit (section 1, Small Charitable Donations Act 2012)
Longer term measures
- The simplification of the advertising relief by zero rating all charity advertising on social media.
- Investment in the Future of Gift Aid project to help ensure that the relief becomes fit for the digital age, bringing significant benefit to both HMRC, the charity sector and its donors.
- Constructive engagement with CTG and other sector representatives on a solution to the problem of irrecoverable VAT suffered by charities.
- Relief for buildings used for a relevant charitable purpose to be reconstituted to allow partial relief where a building is used only partially for non-business purposes.
- The introduction of a zero rate on charity care sector fees to allow full input tax recovery.
- The introduction of a zero rate to housing charities on supplies of goods and services connected with the removal of dangerous cladding.
- For the Government to issue a consultation document with the aim of understanding what improvements could or should be made to bring the VAT relief for people with disabilities up to date, to eliminate unfairness and to ensure that the relief remains relevant.
You can read CTG’s Budget Submission here.