Opinion

Cable cuts the way for gift aid revisions

Governance | 9 Aug 2010

As Vince Cable pledges this week to cut bureaucracy in charity regulation, Charities Aid Foundation head of policy and public affairs, Hannah Terrey sees hope for gift aid revisions.

Business secretary Vince Cable recently launched new rules to hand powers to individuals, companies and charities, cutting red-tape and bureaucracy. With the charity sector having to do more with less and with the burden of bureaucracy disproportionately falling on smaller charities and community organisations – the lifeblood of the 'Big Society' – this is welcome news. 

One of the key points is that a Regulatory Policy Committee will scrutinise and oversee all proposals before policy decisions are made. This, it is hoped, will speed up the delivery and effectiveness of new and current legislation. It is not yet clear either whether the members of the Regulatory Policy Committee have much experience or knowledge of the charity sector and the impact of regulations on it. We would welcome a review of the membership, or, at least, a mechanism to ensure that people with appropriate knowledge and expertise are involved in scrutinizing and impact-assessing proposals.

Freedom will require a shift in attitude

Of course there are a number of areas where our civil society would like to see reduced regulation, none more so than that surrounding gift aid and the substantial donor legislation. In fact I’d go as far as to say that many in the sector would be happy to see the substantial donor rules, which the government is currently trying to improve, scrapped altogether.

Gift aid regulation is obviously another prime contender - with layer upon layer of rules and regulations added during the lifetime of the scheme. We hope that this new approach provides an opportunity to radically simplify the system and bring it up-to-date. The Gift Aid Forum will agree its proposals for how the system could be improved by the end of September.

However, it will take a shift in HMRC’s current attitude to fraud and risk for this freedom to be achieved. Indeed, all the messages recently received from it, including the introduction of the fit and proper person’s test, have been about being firmer. Although we support the aim of preventing abuse of charity, the response has in the recent past been disproportionate and implemented without sufficient consultation.

If there really is ministerial will to increase trust and make things easier for charities, this has to be translated into action within government departments. Open dialogue between government and the sector about what is and isn’t possible would make it easier for the sector to contribute constructively to this process and debate.

Hannah Terrey is head of policy and public affairs at the Charities Aid Foundation

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